Why estate residents should get to vote on regeneration schemes

The London skyline. Image: Getty.

Labour’s London Assembly Housing spokesperson on the need for local democracy.

On Friday, Sadiq Khan published his long-awaited Good Practice Guide to Estate Regeneration. The major change from his draft guide, published for consultation last year, is the inclusion of mandatory ballots where demolition takes place as a condition of schemes receiving mayoral funding. By including ballots, the Mayor has shown he has listened to community groups, as well as the unanimous voice of the London Assembly.

I have long argued for ballots where homes are to be demolished. Estate residents are generally the only people who face the prospect of having their homes demolished. Therefore, it is only right that they should be able to vote on whether demolition takes place.

The question of exactly who should be balloted is one on which a consultation will now take place. It is my strong view that those balloted should be actual residents who live in the homes that it is proposed are demolished. That means private tenants should get a vote, but not their non-resident landlords.

The Mayor’s Good Practice Guide to Estate Regeneration also reaffirms his pledge that there must be no net loss of social housing on regeneration schemes. This is crucial. An assessment by the London Assembly’s housing committee in 2015 found that there had been a loss of more than 8,000 social rented homes across 30 regeneration schemes in London. The Mayor demonstrated he is standing by this commitment recently when he used his planning powers to reject a proposed estate regeneration scheme at Grahame Park in Barnet that would have resulted in the net loss of 257 social houses.


Estate regeneration can work well, but it is always done best when led by, or delivered in partnership with, residents. The regeneration of Bacton Low Rise by Camden Council is a superb example of this, and could not be more different to Barnet’s approach. The quality of the new build council homes is absolutely stunning, with residents involved in the design of the scheme from the beginning. Once the scheme is completed there will be a net increase in the number of genuinely affordable council homes as well as new shared ownership homes. Yes, market sale homes have to be built to pay for the new council homes in the absence of government funding, but crucially Camden Council retains the ownership of the land on which they are built.

It’s important to remember that when local councillors are coming forward with regeneration schemes, they often can’t do what ideally they would like to do because of national government policy. Councils that are looking to provide more and better housing for local people are constrained by government restrictions on their ability to borrow to build new council homes, by the Right to Buy scheme, and by outdated compulsory purchase laws that mean land can’t be compulsorily purchased for a fair value. Never mind the fact that government funding for new social housing is practically non-existent. VAT rules can sometimes make knocking down and rebuilding housing cheaper than refurbishing it, because VAT is charged on refurbishment but not new build homes.

I believe councils should welcome the inclusion of ballots as adding legitimacy to proposed schemes. Some councils are very good at including residents in designing regeneration schemes, but others sadly are not. Mandatory ballots mean that councils and housing associations must engage effectively in order to gain approval. This necessitates the active inclusion and involvement of residents from the very beginning.

Tom Copley is Labour’s London Assembly Housing spokesperson. 

 
 
 
 

The number being helped by Help to Buy is at a record high. That’s not a good thing

Help to Buy, Bristol, 2013. Image: Getty.

James Brokenshire the secretary of state for the Ministry of Housing, Communities and Local Government (MHCLG) has been having a busy week. On Monday, the department published its rough sleeping strategy, while Tuesday saw the release of the long awaited social housing green paper.

Neither has filled commentators or the housing sector with much confidence – not least because they offer no new support for genuinely affordable homes. This is a problem because, well, there aren’t enough and building more will cost money. 

Since 2010, affordable housing funding has taken a significant hit. Financial support for building social rented homes, where rents are linked to local earnings, has been cut in favour of rents set at 80 per cent of market rents. As a result the supply of new homes at social rent has dwindled dramaticallyIPPR research has shown that, across the country, the so-called affordable rents which have replaced them are simply too expensive for many households on low incomes.

This lack of a support stands in marked contrast to government’s approach to homeownership, as figures released today on sales through the Help to Buy show. Help to Buy loans, in which government lends a household 20 per cent of the value of a new build home (40 per cent in London), are at a record high. To date, around 170,000 homes have been sold through the scheme.

But the Help to Buy policy has two key problems. Firstly, far from supporting those who otherwise couldn’t afford to buy, the scheme is instead assisting households who would be able to buy at some point without support; lower income households continue to be priced out. The government’s own analysis shows that many of those buying through the scheme would have been able to buy at some point in the future without the scheme.

At the same time, the data released today shows that more than a third of those who have made use of Help to Buy to date have household incomes of £50,000 or higher. Around 1 in 10 of those who have bought through the scheme have a household income of over £80,000.

Secondly, far from improving affordability, Help to Buy worsens it. Research by the housing charity Shelter has shown that, through boosting demand for scarce housing, Help to Buy has inflated house prices. 


The main beneficiaries of this are the developers who have factored the scheme into house prices and as a result have seen a significant increase in their profits. Take, for example, the excessive bonus paid to the CEO of Persimmon Homes earlier this year of £75m (originally £100m), which stoked such shareholder and public fury: that was linked to a surge in profits driven by the Help to Buy scheme.

Both of these critiques demonstrate that government is currently not putting its balance sheet to best use. To date, Government has leant out £8.9bn through the Help to Buy. In 2017 alone, the money could have been used by councils to build somewhere in the region of 22,000 homes for social rent, over 400 times the amount actually built in 2016-17.

Letting councils borrow to build affordable housing would make significant steps towards delivering the 145,000 affordable homes which are needed each year, tackling poor housing conditions, over-crowding and poverty. At the same time, it would generate a return for councils, which could in turn be used to invest in more affordable homes and improve existing ones.

Yet, our absurd national accounting rules currently prevent this from happening. Help to Buy lending is not counted towards the deficit. This is because, asGeorge Osborne boasted when launching it, the Help to Buy scheme is a financial transaction, and therefore the taxpayer would be “making an investment and getting a return”.

By contrast, under rules imposed by the Conservative Government of 2010-15, councils are subject to a debt cap on what is called the housing revenue account. This prevents them from borrowing prudently against future rental streams to build council homes. This is despite cries from the Local Government Association that councils want to get building in order to tackle the housing crisis.

On a more positive note, the social housing green paper indicates that the government is starting to budge on this. It has already lifted the borrowing cap slightly in areas with pressure on affordability and is using these schemes to test the possibility of going further. 

This is welcome, but as the social green paper shows warm rhetoric on its own is not enough. Government should commit to changing the borrowing rules, lifting the local authority debt cap and phasing out help to buy.

Darren Baxter is a Research Fellow at IPPR he tweets @DarrenBaxter.