Affording a home in London? Not so elementary after all
13 January 2016, Blog
The London housing crisis is by far and away the key topic of debate in the run up to May’s mayoral election. Labour candidate Sadiq Khan and Tory candidate Zac Goldsmith face the daunting task of drafting housing policies that will protect London’s wonderfully diverse population. Failure to do so will run the very real risk that the nation’s capital becomes exclusively accessible to the mega-rich through a process of economic social cleansing.
What would become, for instance, of Arthur Conan Doyle’s iconic London detective, Sherlock Holmes, in the capital’s modern day housing market? Would he indeed be able to live in the city he once described as “that great cesspool into which all the loungers and idlers of the Empire are irresistibly drained”? We decided to investigate how everyone’s favourite sleuth might fare.
The typical income of a private investigator is estimated to be in the region of £30,000. However, Mr Holmes was a detective of some repute, so we’re prepared to award him the generous annual sum of £40,000, leaving him a monthly take-home of £2,500. Unfortunately, it would appear that we can immediately rule out Holmes’ old stomping ground on Baker Street, as this would be significantly over budget. The average two bed flat for rent on Baker Street nowadays commands a whopping £5,500pcm – Mrs Hudson wouldn’t be complaining. So where then would the private investigator be able to hang his deerstalker, depending on whether Khan or Goldsmith wins the mayoralty?
Goldsmith enjoyed PM David Cameron’s backing in announcing proposals to “build two affordable homes for every social housing property sold.” The Richmond Park MP’s campaign team claims amendments to the housing bill will see an additional 10,000 homes constructed in London on top of the 50,000 homes earmarked in the original bill. The funds procured through the selling of social housing would be used to improve the London Help to Buy Scheme by doubling the available loan to 40% of the property value. On the face of it, this sounds as though Sherlock may yet be able to continue plying his trade in London. It’s important to remember however that ‘affordable’ has become a rather ambiguous term. In many central London Boroughs, ‘affordable’ can refer to any property being sold at 80% of market value. Goldsmith’s team have been very reluctant to define what their notion of ‘affordable’ truly is….
What then would a London governed by Sadiq Khan mean for our accommodation seeking sleuth? Khan is proposing to set a non-negotiable 50% housing target on all new large scale property developments. This would be a significant increase. Even the hugely overpopulated Borough of Tower Hamlets only demands 35%. Again though, we encounter the ambiguity of what constitutes ‘affordable’. Perhaps the most promising of Khan’s proposals is the London Living Rent. This “new form of affordable home” would see rent set at a third of average income. In order to understand the reasoning behind Khan’s seemingly drastic policies, you don’t need to look any further than his own constituency of Tooting. Tooting has suffered more than most at the hands of gentrification. What was once seen as a downmarket borough now commands an average house price of a staggering £860,000. It would appear that Sherlock can rule out Tooting for his bachelor pad (Citizen Smith would have already moved out).
It’s clear that both mayoral candidates have at the very least acknowledged the housing crisis. However, if implemented in isolation, none of the proposals will even come close to meeting the number of new homes required in the capital. A London Living Rent might signify progress, as might an increase in funding for the London Help to Buy scheme, but they will not be enough. That means doing all of what they propose and more, you don’t need Sherlock’s trademark magnifying glass to realise that. Although the term ‘radical’ has become a little controversial in this mayoral race, there is no denying a radical approach is required and that might not be so elementary after all.
*Please note that for the purposes of this article, we’re assuming Holmes’ partner in (solving) crime, Dr Watson, is receiving a negligible income from his army pension.
Written by Andrew Deegan, Senior Account Executive at JBP