With high house prices and housebuilding lagging behind demand, London’s affordable housing stock is at a premium. London’s private rental prices are also increasingly unaffordable, rising 6.2 percent in the year to January 2016, in average weekly pay in the year to December 2015. 2compared to a 1.4 percent rise 3This is leaving those unable to access social housing yet on low-to-middle incomes struggling to survive in the capital. We looked at challenges facing housing associations on delivering the Affordable Rent (AR) model in November 2015, before undertaking a site visit to Barking and Dagenham in December to look at the innovative models being used in the borough to develop new affordable homes for rent.

Finally, we discussed innovative investment and development models for affordable homes for rent in London. The Affordable Rent (AR) model, first introduced in 2011, was intended to give housing providers greater flexibility in the range of products they develop, as well as deliver homes that would be affordable to social housing tenants. However, with declining levels of grants, changes to welfare, and the introduction of new government policies, housing associations have found that delivering the AR model is becoming increasingly challenging. The high cost of land is one of the biggest challenges facing affordable housing providers and City Hall will need to be proactive in managing this problem. Affordable housing providers are finding innovative ways to keep their books balanced while ensuring that homes are affordable for new tenants. We heard that this comes from focusing first on tenant needs. For example, on the New Era Estate in Hackney, Dolphin Living operates an income-based “personalized rents” system, having promised residents the introduction of “a rent policy that was ‘demonstrably fair’”. The 80 per cent of tenants who have opted into this system must pay a fixed 30 per cent of their income on rent, reviewed every three years, with disposable income calculated according to the Joseph Rowntree Foundation minimum income standards statistics.