No political will to tackle the housing crisis

http://www.theguardian.com/society/2015/feb/04/no-political-will-tackle-housing-crisis

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While the stupidity of the Tory government’s change in relation to affordable housing is obvious to all – even Tories dealing with the issues, such as planners at Westminster council – who is going to even try to deal with the house-price madness (Property forms profit as home rules change, 2 February)? Average house prices in London are now far beyond even bankers and others on £100,000-a-year salaries: an average flat in north-west London costs over £900,000. Who let this happen and, more important, who is going to do anything about this ludicrous situation?

Not the Tories, since Brandon Lewis, the Conservative housing minister, talks about requirements for “affordable” flats in new developments as “a stealth tax” that hindered regeneration and encouraged empty properties. And that is in relation to the developers’ notion of affordable, at 80% of local prices. The crude mansion tax from Labour might have some impact on prices at the top end, but even a complete revision in council tax will not affect these prices without hitting every householder equally hard. We did nothing to earn the increased values of our flats, this is just a side effect of all the funny money looking to London for a safe haven for their mostly ill-gotten gains, rich Greeks included.

Is there an economist in the house (or House), the Treasury, the Bank of England with any idea what to do about this insanity? Apparently not.David ReedLondon

• Congratulations to the Guardian for exposing the loss of affordable housing that has resulted from the government’s successive changes to planning law.

The latest changes to planning law are in a series that have progressively created major loopholes to excuse developers from providing affordable housing. Just south of Sutton station, in south London, there is an office building, empty for some years, which the developers propose to convert to 128 luxury flats. The day before Sutton council’s planning committee was to approve the scheme, which included a significant number of affordable homes, the developers withdrew the scheme. They had spotted the advantages to them if they followed a newly created route called “prior approval” that has now forced the council to accept the application with zero affordable homes included.

On one calculation, our borough may have lost up to 500 affordable homes due to that legislation. The latest changes you highlight are further steps on a path that is seriously undermining the efforts of local authorities to help those in dire need of better housing.Councillor Richard CliftonChair of planning committee, London borough of Sutton

• It is good to see the Westminster Property Group, with its big ticket property club members, supporting more social housing in central London. But central London’s affordable homes shortfall is a special case, which has no general case application on a nationwide basis.

Brandon Lewis, the housing minister, is nearer the mark elsewhere. Excessive section 106 tariffs and the affordable homes burden do push many projects into the non-viable basket. Simply look at the numbers; that is to say the house sale proceeds from which these public benefits are funded. Central London sale values, as a rough and ready average, are £1,500 per square foot. Put differently, a modest, 1, 000sq ft three-bed town house or flat will cost the buyer £1.5m, or more with stamp duty on top. Put 15 of them on to an acre, and the gross receipts are £22m. After building costs, profit margin and land, there is still scope to fund some affordable homes.

Apply the same model in the home counties, for example in Reading, where the sale price for the same home will be nearer £350psf. What is more, density will also be about one third lower. The gross receipts in this case are £3.5m, less than 20% of the value generated by an acre in central London. Far less margin left over here, particularly if developers overpay for their land. Then they will just wait.

Until local authorities with supplies of unrestricted, white land challenge the vested interests, and decide to release far more of it for housebuilding, the affordability crisis will continue. This initiative is near impossible for Tory authorities in rural area, where the nimby lobby has the final veto.Ian CampbellRichmond upon Thames, Surrey

• The dearth of genuinely affordable homes to buy or to rent can only be made worse by the rule changes that allow property firms to reduce, or even avoid, making contributions to build affordable housing. Recent data from London’s Poverty Profile – independent research carried out by the New Policy Institute and funded by us – reveals that only seven London boroughs met their target for affordable home completions from 2010 to 2013. This lack of affordable housing is creating serious problems in the capital; after housing costs are taken into account, 28% of Londoners are now living in poverty. We need to build more homes that people can actually afford.Mubin HaqDirector of policy and grants, Trust for London

• In the early 1970s, we took out a mortgage two and a half times my salary to buy a home to live in. That same home is now valued at 60 times that amount. One reason for huge increases in the prices of homes is that when final salary pension schemes were scrapped people looked to property as an alternative nest egg to supplement their pension. A shame then that John Lewis is adding fuel to that fire (John Lewis scraps final salary pension, 3 February).David MurrayWallington, Surrey