More in London want subsidised housing

Source : Business Times – 15 Oct 2009

Number of applicants on wait list up 6%, the highest since 1999

The number of Londoners waiting for government-subsidised housing rose by 6 per cent to the highest since 1999 as the UK economy soured and the supply of new homes tightened.

The waiting list increased to 353,130 households in 2008, or one in nine London families, from 333,857 a year earlier, the National Housing Federation said in a report called ‘Home Truths’ published yesterday.

‘The economic situation is putting pressure on social housing,’ said Belinda Porich, London regional head of the federation, in an interview. ‘We are building way less than the number of people coming onto the list each year.’

The worst economic slump since World War II has increased unemployment, reduced home construction and raised demand for social housing in the UK capital. It’s a category that includes rent-subsidized, council apartments and houses and properties purchased using low-cost, government-backed plans.

The federation says there continues to be an ‘affordability gap’ in the UK capital. It estimates that the buyer of an average-priced home in London, which costs £362,810 (S$798,182), would have to have an annual income of £93,294. That’s based on a mortgage for 90 per cent of the property’s value and three-and-a-half times the buyer’s salary.

The city’s average household income is £26,156, according to the federation.

Houses in the west London borough of Kensington & Chelsea are the most expensive in the capital, at £1.18 million on average, the federation said, citing government Land Registry figures. The borough with the cheapest house prices is Barking and Dagenham, in east London, at £197,630 on average.

‘Even by London standards, these are astronomical prices and many people – especially young, first-time buyers – can only dream of owning a home,’ said Ms Porich.

The average private rent in London is £206 a week, compared with £86 in a subsidised house or apartment, Ms Porich said.

The housing federation represents non-profit associations that own and manage 380,000 properties in London, or about 11 per cent of the city’s housing stock. Association properties are allocated based on criteria such as income, family size and social need.

Ms Porich said the federation is looking to find ‘new models’ to pay for construction of subsidised homes because its government funding may be squeezed next year.

That may include building houses or apartment blocks on public land in collaboration with local government councils to reduce acquisition costs, she said.