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Agenda item

Draft Housing Strategy & Private Sector Housing Strategy: Evidence Base

Minutes:

5.1 The Chair opened the item by explaining that the Commission was keen to hear about the evidence base for the draft Hackney Housing Strategy & Private Sector Housing Strategy.

 

5.2 The Commission saw this discussion as timely, giving members an opportunity to challenge assumptions and the robustness of evidence-gathering at an early stage. The Commission planned to come back to these strategies later in the municipal year to look in detail at their emerging priorities and how they might be delivered.

 

5.3 Representing London Borough of Hackney

·  James Goddard, Assistant Director Strategy, Assurance and Private Sector Housing

 

5.4 The Chair then invited the Assistant Director Strategy, Assurance and Private Sector Housing to give a verbal presentation. The main points are highlighted below.

 

5.5 The Council had recently commissioned a Strategic Housing Market Assessment (SHMA) to provide an analysis of the full housing needs within Hackney and the future scale and mix of housing requirements. This would inform the evidence base for Selective and Additional Licensing, the Private Sector Housing Strategy, the Housing Strategy and the Local Plan.

 

5.6 Development of the new strategies must respond to a number of strategic priorities and issues, such as the Social Housing Regulation Act & Housing Ombudsman, Renter Reform Bill provisions, higher interest rates, mortgage affordability and private landlords exiting the market, rising homelessness and rough sleeping, inflationary pressure and impact on development and viability, the pathway to net zero and the refugee and migrant crisis.

 

5.7 The Council managed a wide range of building types and different tenures, and there were specific challenges for the local authority as a landlord. This included fire safety and compliance, decarbonisation, major works, damp and mould, repairs performance, pressures on the Housing Revenue Account, the introduction of the new housing management system and resident engagement.

 

5.8 The introduction of new consumer regulation such as the Social Housing Regulation Act (passed in July 2023) and the new social housing regulatory regime (to be introduced in April 2024) posed challenges for the Council as a landlord too. Increased oversight may potentially lead to fines, short-notice inspections and orders to carry out repairs. Local authority landlords were also increasingly being subject to regulatory judgements and/or Housing Ombudsman maladministration findings.

 

5.9 A number of evidence gathering exercises were undertaken to produce the SHMA. This included secondary source evidence data review, a household survey, strategic documents review, agent review, stakeholder review, officer discussions, community consultation and focus groups.

 

5.10 In respect of the community consultation, seven young residents were trained to carry out face-to-face research across key areas in Hackney and linking in with existing projects and activities. Five focus groups were also scheduled, co-facilitated by young researchers trained in community consultation and attended by residents who were reflective of the borough’s demographics.

 

5.11 The quantitative evidence gathered suggested that Hackney would see a pronounced rise in its older population and slight fall in the child population over the next 20 years. In terms of household types, there was also projected to be significant growth in single and cohabiting adults compared to families.

 

5.12 As of 2022, Hackney had 119,090 dwellings, of which 83.8% were flats. 15.9% were houses and 0.2% were bungalows. There were 106,087 households across the borough, of which 24.6% were owner occupiers, 32.4% private renters and 43% lived in affordable housing.

 

5.13 Hackney had one of the lowest percentages of private sector stock in London. Having said this, the absolute number was very high with around 32,000 privately rented homes across the borough. Outside of Glasgow, Hackney has had the highest increase in private rented stock across the UK over the past 20 years.

 

5.14 Having said this, Hackney did have the highest proportion of social affordable housing in London and the highest target for new affordable homes delivery across all London Boroughs.

 

5.15 The size of the private rented sector was higher than the England average in all wards but King’s Park, and higher than the London average in many wards. The minimum threshold for property licensing was the England average - meaning a licensing scheme King’s Park ward would not be able to operate in the ward.

 

5.16 Build to Rent units were properties that had been built to provide rental accommodation to tenants. Build to Rent tenures are more secure, and are typically more professionalised than standard private rented sector properties. In total there were 1,413 Build to Rent units advertised across London of which 2.3% (32) were in Hackney.

 

5.17 House prices in Hackney had outgrown the London average and were more than double the national average. As of 2022, average house prices were around £600k in Hackney, £510k in London and £260k across England.

 

5.18 There were various challenges in regards to housing affordability in the borough. If a resident was on a lower or median quartile income in Hackney, there were no private rented properties which could be considered affordable to them in 2022.

 

5.19 The only tenures which could be described as genuinely affordable in Hackney were social rent (of which only the most in need qualify) or London Living Rent (of which few were available). Home ownership remained unaffordable to almost all households on low to median incomes, except Share Ownership for some.

 

5.20 There was a huge gap between affordable housing demand and supply, with a net need for 1,780 affordable dwellings in Hackney per year. There were over 8,500 households on the Council’s social housing waiting list - with a rising number in priority need (increased from 18% in 2014 to 34% in 2021). The average wait time for 1 bed was three years, while 2-4 bed units were 13 years and 5 bed units were 39 years.

 

5.21 Lettings turnover between 2018 and 2022 was particularly high in wards such as Hoxton East & Shoreditch (over 70%) and Hoxton West (over 65%). Many others were around the 40% mark, which was still relatively high when compared to other London Boroughs.

 

5.22 Lower, upper and median quartile rents all increased significantly since 2021. Since 2018 there had been a significant shift towards higher value rents, particularly over 2021/22. There were also significant geographical differences between the cheaper north of the borough and more expensive south.

 

5.23 In Q4 of 2022 there were 15,827 properties listed as short term lets in Hackney, of which 1,532 were active - only Kensington & Chelsea and Camden had more, and Tower Hamlets and Westminster were around the same level. The Council had little power to regulate this market in order to alleviate the pressure they put on the availability of local housing.

 

5.24 Hackney was the 22nd most deprived borough across all English Districts and the 2nd most deprived area in London behind Barking & Dagenham. It was below the national average for fuel poverty but one the most affected boroughs, likely owing to property age and household income.

 

5.25 The qualitative evidence gathered through the household survey suggested that 21% of  households across all tenures had an average income of £101,400 or more annually. The second highest percentage of household income across all tenures was £26k to £39k at around 12%.

 

5.26 In terms of support needs for residents under 65, the survey suggested that 36.9% of respondents felt that company/friendship was their biggest need. This raised important questions around the suitability of housing for older people and community cohesion.

 

5.27 Newly forming households were asked what their housing plans were over the next five years. 27.7% of respondents believed they would own an affordable home, 39.9% believed they would be in social housing and 54.6% felt they would be in the private rented sector. This was clearly not in line with the housing options available.

 

5.28 The number of people aged 65+ was expected to increase by 24% by 2037. The survey suggested that more specialist accommodation and co-housing was desired over the next five years. Similarly, the survey suggested that there was at least one person with an illness/disability in 32% of households, and stakeholders had reported difficulty in obtaining the capital investment to deliver new supported housing schemes. Further work to explore housing options in these areas would be undertaken in the coming months.

 

5.29 47% of respondents identified financial security as one of the top issues that impact on their health and wellbeing and reducing the cost of living was identified as the top priority that would have the biggest impact on health and wellbeing.

 

5.30 In terms of stakeholder feedback, 88% of residents considered improving repair services as important or very important. Stakeholders identified a need for all forms of affordable housing, but particularly for social rented homes which are in very short supply. 55% of residents considered building new council and housing association homes for social rent to be “important” or “very important”.

 

5.31 77% of residents are satisfied or very satisfied with their neighbourhood as a place to live. 32% consider their neighbourhood has got better in the past two years and 21% think it has got worse. 17% said they do not feel safe because of the high volume of crime, and especially serious crimes happening in their area with no visible police presence, no lighting and not enough CCTV.

 

Questions, Answers and Discussion

 

5.32 A Commission Member asked for further information on the number of empty homes in the borough, and any plans to bring them back into use.

 

5.33 The Assistant Director Strategy, Assurance and Private Sector Housing explained that the Council was aware of just below 1k long-term empty properties (properties left vacant for six months or more) across Hackney. This excluded all council-owned properties but included all private housing and registered social housing provider stock. Having said this, the vacancy rate in Hackney was 2%, which was on the lower side when compared to other London Boroughs.

 

5.34 Bringing empty homes back into use was a complicated process and it was estimated that around 200 of these properties would not be able to be brought back into use for various reasons, such as being subject to court cases or being included within wills. The Council was looking to support owners to bring properties back into use where viable, and planned to hire a dedicated Empty Homes Officer to support this work.

 

5.35 Where necessary, the Council would look to serve Empty Dwelling Management Orders, which allowed the Council to take over the management of the property, or Compulsory Purchase Orders, which allowed it to acquire the property. Both were time consuming and costly so were often used as a last resort.

 

5.36 Bringing empty homes back into use would be a key priority to be addressed within the new Private Sector Housing Strategy. Empty home cases were often complex and the service would likely require additional resources to keep numbers to a minimum.

 

5.37 A Commission Member asked whether the Council had engaged with sustainable short term letting platforms such as Fairbnb in light of concerns around the growth of short-term lettings.

 

5.38 The Assistant Director Strategy, Assurance and Private Sector Housing explained that the Council did engage with sustainable short-term letting platforms such as Fairbnb, but these platforms represented a small section of the market.

 

5.39 More generally, it was difficult to build a picture of the short term letting market locally as platforms such as Airbnb did not release their data easily for various reasons. Ultimately the Council needed greater powers to regulate this market locally in recognition of the impact that the market had on local housing supply and rental prices.

 

5.40 A Commission Member asked whether the Council had an understanding of the amount of former council homes purchased through Right to Buy were now being in the private rental market.

 

5.41 The Assistant Director Strategy, Assurance and Private Sector Housing explained that 9,118 properties had been sold through Right to Buy, of which 42% were now in the private rented sector. While the policy had clearly had an impact on the availability of social housing locally, it was a popular policy which may not be changed anytime soon.

 

5.52 A Commission Member asked about the plans in place to hold private landlords accountable and protect private renters, considering the number of private rented properties in Hackney.

 

5.53 The Assistant Director Strategy, Assurance and Private Sector Housing explained that the Council was looking to extend the requirement for the additional HMO licence and selective licence across the whole borough. This would need Secretary of State approval, and the Council was currently in the process of collating the evidence base for a decision.

 

5.54 A Commission Member asked how much weight would be given to different elements of the evidence collected so far, for example around the need for family housing and supported housing.

 

5.55 The Assistant Director Strategy, Assurance and Private Sector Housing explained that there were various ways in which the evidence collected could be viewed. For example, on the one hand there was clear demand for single and cohabiting adult households compared to families. However, there was clear demand for family housing from those in priority need on the Council’s waiting list which did not match up with current supply. 

 

5.56 Important policy conversations would need to be had around the type of housing market the Council wanted in Hackney, and the impact this might have on other areas such as the local economy and education. It was within the Council’s gift to shape the local housing market if it wished to do so, rather than be reactive to it.

 

5.57 A Commission Member asked what was meant by “affordable housing”.

 

5.58 The Assistant Director Strategy, Assurance and Private Sector Housing explained that central government defined what was meant by affordable housing. Affordable housing for rent included homes let at least 20% below local market rents (affordable rental properties) or let at rates set between market rents and social rents (intermediate rental properties).

 

5.59 Most of the affordable housing stock in Hackney was social rent (set at around 50% of market rents). The Council also offered rental properties at Hackney Living Rent - set at a third of the average of local incomes.

 

5.60 Affordable housing for sale included Shared Ownership, whereby homes are sold at a discounted rate (at least 20% below market value) and homes referred to as being ‘Rent to Buy’.

 

5.61 A Commission Member asked whether any housing for sale in Hackney was truly “affordable” for key workers living in the borough.

 

5.62 The Assistant Director Strategy, Assurance and Private Sector Housing explained that the Council defined anyone residing in Hackney with an income of between £25k to £60k as a key worker. Shared ownership was available to anyone with an income of between £25k to £90k, and the SHMA suggested that this product was a realistic option for a considerable percentage of local residents.

 

5.63 However, the data did not account for the potential for associated costs. For example, some shared owners found that service charges can rise quite rapidly, that they needed to pay estate charges and ground rents, and that they needed to pay all repairs and maintenance costs.

 

5.64 It was noted that the Council was in the process of commissioning an independent panel alongside Camden and Islington to look into the delivery of intermediate homes (affordable home ownership and intermediate rent). The interim findings of this piece of work would be reported to the Commission once ready.

 

5.65 A Commission Member asked whether there was any demand locally for community land trusts and co-operative housing arrangements, and whether the Council had any plans to explore housing options in these areas.

 

5.66 The Assistant Director Strategy, Assurance and Private Sector Housing explained that there was demand for these types of housing arrangements in Hackney, and it was an area that the Council had been exploring alongside local stakeholders.

 

5.67 For example, the Council had been working closely with the London Older Lesbians Collective to explore potential sites for community land trusts and co-operative housing arrangements, however they had proved too costly.

 

5.68 It was noted these types of housing arrangements would be looked at as part of the scope of the independent panel reviewing the delivery of intermediate homes in the borough.

 

Summing Up

 

5.69 The Chair thanked Commission Members for their questions and all witnesses for their responses and engagement with the scrutiny process.

 

5.70 It was explained that the Commission would follow up by looking at any emerging priorities, how the strategies will be delivered, how the Council has considered key risks and key measures of success in the new year before the strategies are adopted.

Supporting documents: