Revealed: Housing gentrification ‘costing low-income Londoners £80 a week’

Regeneration projects in London are knocking down council estates and not replacing them with enough genuinely affordable homes – and the gentrification is costing low-income Londoners £80 a week.

Scores of council and social housing estates across London have been earmarked for demolition in recent years using a cross-subsidy model where expensive properties are put on the market or rented privately to fund “affordable” homes on the sites.

A report from University College London’s Dr Joe Penny found that the projects routinely underproduce truly affordable housing for low-income Londoners.

The academic found failures to deliver enough affordable homes increase rents of council and social housing by an average of more than £80 a week. It also makes living in these estates unaffordable for people impacted by the benefit cap or who are not in receipt of universal credit or housing benefit to afford rents.

Dr Penny, a lecturer in global urbanism at UCL’s Urban Laboratory, said: ‘The findings from this report evidence the urgent need for a fundamental rethink of estate regeneration in London.

“The current cross-subsidy model is badly failing council and social housing tenants, as well as those on housing waiting lists. Truly affordable homes – that is, homes that cost no more than 30% of net household incomes – are not being replaced in sufficient quantities; social and affordable rents are increasing beyond what those on the lowest incomes can afford; and structurally sound buildings are being wasted amid a deepening housing emergency.

“While many council and social housing estates badly need investment and refurbishment, they are a precious resource providing secure homes to London’s diverse working-class communities. They should be protected and expanded, not demolished and diminished.”

Dr Penny assessed six of the ‘best’ and ‘worst’ regeneration projects across three London Boroughs including the Aylesbury Estate in Southwark.

Regeneration plans on the Aylesbury Estate have been subject to opposition. Resident Aysen Dennis won her one-woman protest to block the plans to knock down the estate and replace it with new flats in a landmark High Court case in January.

The report considered three different models of cross-subsidy estate regeneration: developer-led approach, local-housing company approach, and council-led approach.

It found the loss of social and council housing and the displacement of low-income and working class tenants across all three models.

The total number of council and social housing was reduced by all but one of the regeneration projects.

A total of 23,551 new homes have been or are expected to be delivered by 2035 with 8,629 council rented homes demolished or set to be knocked down across the six estates assessed in Southwark, Barking and Dagenham, Lambeth, Hackney and Camden.

The report found there will be a net loss of 2,151 truly affordable council homes with just 6,478 (27%) of demolished homes replaced with social rented homes

Almost double the amount of social or council homes will be for private market sale or rent at 11,961 homes (51%).

The real-world consequences are higher rents for council and social renters of up to £80 per week.

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The Big Issue called for the definition of affordable housing to change under our Blueprint for Change and it’s a call echoed in the report.

The UN-Habitat definition lists affordable housing as costing no more than 30% of a household’s total monthly income in rent. 

But some tenures on some ‘affordable rent’ homes on sites covered in the report could see tenants paying as much as 76% of their household income on rent.

The report used the example of a person impacted by the benefit cap and living in the redeveloped Aylesbury Estate spending 55% of their income on rent, despite paying social rent.

Saskia O’Hara, legal caseworker and community legal organiser at Public Interest Law Centre, who commissioned the report, said: “As legal aid lawyers, we witness daily injustices stemming from the housing crisis. This research, for the first time, clearly demonstrates the damage caused by current “affordable” housing policies and the push for demolition, which disproportionately affects many of our brave, working-class clients.

“Immediate action is needed to adopt policies aligned with UN standards of affordability. Time is running out, and the impact on children in temporary accommodation is especially urgent.”

A spokesperson for the Mayor of London said: “The mayor is clear that any plans for estate regeneration should be in the best interests of those who live on the estate and contribute to meeting Londoners’ pressing need for genuinely affordable homes. 

“In the past, estate regeneration schemes too often failed to deliver the best outcomes for Londoners, which is why Sadiq brought forward significant changes in his London Plan and introduced a funding requirement for resident ballots to strengthen protections for social tenants and ensure the reprovision of homes at social rent.”

Labour has called for a ‘council house revolution’ and re-introduced mandatory housebuilding targets to deliver 1.5 million homes while in power.

But the government is yet to set a public target for building social housing despite calls from the likes of Shelter to build 90,000 social rent homes a year to tackle the housing crisis.

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