Social rent of £295.50 challenged by Southwark Law Centre
Southwark Law Centre has written to the council to ask why social rents on new housing developments are higher than the limits set by government. One development, Gutenberg Court, has a social rent of £295.50, which is £130 above the social rent cap of £164.87, for a two-bed property. It is also wrongly advertised as 'market related'.
For the past year the law centre's Planning Voice Project has been monitoring Southwark Council's Homesearch website, which is used by those on the housing waiting list to find a new home. It has written to the council with seven examples of private developments which have rent levels above government formula rent cap guidance. All the developments have been approved on the condition that a proportion of the housing is social rented.
The developments identified include Elephant Park, in the site of the former Heygate estate, and three where the social housing is delivered by the same registered provider, Optivo.
Government guidance limit on annual rent increases 2022-23 (from April 2022)
The seven developments are; 44 Willow Walk, Eden House, Shirley Chissom Court, Dockley Apartments, Gutenberg Court, Elephant Park and Joseph Lancaster Terrace. All the rents in these schemes exceed the rent cap by various amounts, both with and without weekly service charges. The council has said that it will investigate the complaints.
Optivo's big social rents
Eden House is a workspace/residential development with 84 homes, on Ilderton Rd, in the Old Kent Rd Opportunity Area. It was approved in 2018 with sixteen social rented units; Optivo provides this, but is charging £216.92, including a £9.86 service charge, against a rent cap of £155.73 for a one-bed flat and £281.54pw, including a £12.35 service charge, against a rent cap of £164.87, for a two-bed flat. A 3-bed wheel-chair accessible flat is let at £332.31, against a rent cap of £174.03.
Shirley Chisholm Court is a residential development of 86 homes, also on Ilderton Rd, approved with eighteen social rented units. Here Optivo is charging a total of £184.03, including £15.69 service charge, against a rent cap of £155.73 for a one-bed wheel chair accessible flat. For a two-bed wheel chair accessible flat the total rent is £198.50 (including a £24.47 service charge) against a rent cap of £164.87.
Dockley Apartments has one hundred and eleven homes and is part of the Bermondsey Spa developments. Here Optivo is charging rents for one and two bed wheel chair accessible flats at the rent cap limit of £155.73 and £164.55, but with large service charges added the total rents payable are £189.03 (rent cap £155.73) and £201.78 (rent cap £164.87) respectively.
Rent and service charges - Peabody and Paragon
Some of the scheme's providers do not show any service charge in the total weekly rent. Peabody are charging total rents of £223.50 (rent cap £164.87) two-bed and £248.72 (rent cap £174.03) three-bed at Willow Walk. Three and four bed wheel chair accessible homes are being let at £252.60 (rent cap £174.03) and £243.26 (rent cap £183.18) respectively.
Paragon and Asra Housing Ltd are charging £261.44 for a one-bed and £295.50 for a two bed at Gutenberg Court. Our last blog post showed how the nine social rented units that were approved at planning committee have been audited as intermediate, or affordable rent, red flagged, but with apparently no enforcement action to date.
L&Q at Elephant Park
L&Q provides the affordable housing on Elephant Park, including one hundred 3-bed social rented units. L&Q are charging below the rent cap for rents, but then adding very large service charges, to take total rents up to at least £213.43pw, against a rent cap of £174.03. The latest flats advertised in Robeson Apts, Rodney Place are a whopping £281.20pw.
The level of social rents was raised by objectors at the planning committee meeting that rejected Lendlease's proposal to build an office block on Elephant Park. Southwark have also started an enforcement action for an audit of the rents of Elephant Park's Sandow House. This was due to be concluded by 21 September, but remains pending.
Southwark Council's Homesearch advert for Elephant Park's Robeson Apartments
Southwark Council and Adrian Court
The social rents being charged for Southwark's twenty-five new council homes on Adrian Court stand in stark contrast to those of the registered providers listed above. The one, two bed units are all being let at below the rent cap level, and the three-bed at just above, all rents including a flat service charge of £10.29.
Conclusion - lost social housing and ineffective monitoring
Southwark Law Centre's intervention comes just after the Local Government and Social Care Ombudsman ruled that Southwark had an effective monitoring system for the delivery of affordable and social rented housing. The size of these rents tells a different story. Registered providers are letting social rent homes at rents way above the rent cap, with and without big service charges. Some of this might be justified when the units are wheel chair accessible, but the amounts vary wildly. Nearly all are also wrongly advertised as 'market related rent', not 'social rent'.
To its credit, Southwark seems to be setting rents according to the rent caps, but the result is that a social tenant can pay dramatically different total rents for the same sized flat - a three-bed on Southwark's Adrian Court costing £176.75, whereas the same on Lendlease's Elephant Park can cost £281.20.
Southwark is getting little enough social housing from new developments as it is. The London Tenants Federation research has found that it there has been a net loss of over 1800 social rented homes in the decade from 2011 and that social housing as a proportion of total housing has been reduced by 13%. We should not be losing what we do get because of slack monitoring.
TABLE - LTF, DELIVERY OF HOMES 2011-2021:
Southwark Law Centre’s Planning Voice project says: “Given the desperate need for social rent housing in Southwark, we are deeply concerned about the levels of rent for properties being advertised on HomeSearch. We have highlighted many that are above the formula rent cap, and Southwark Council should be doing much more to ensure its approved social landlords are not charging excessive rents so they are in line with council rents. We hope they investigate these cases and the rents are reduced. Thousands of tenants need these homes.”