Average Hackney household ‘would have to double income to afford starter home’
- Credit: Archant
The average household in Hackney would need to double its income to afford a Government “starter home”, according to the borough’s housing boss.
Cllr Philip Glanville has written a scathing report reviewing the extension of the Right to Buy scheme to housing association tenants and the forced sale of high-value council homes.
The cabinet member has been vocal in his disapproval of the Government’s bill, labelling it as the most significant threat to the provision of “truly affordable housing” since the Second World War.
The council could have to sell up to 700 homes in the first five years of the scheme, including half of its houses in Hoxton and Stoke Newington, which would likely be valued over the £300,000 threshold.
Aside from that, Cllr Glanville has slammed the Government’s decision to make councils promote “starter homes” – affordable housing sold at a 20pc reduction for first time buyers under 40.
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The council would need to include them in any development of 10 or more homes.
Cllr Glanville said: “Currently all evidence suggests starter homes will be far from affordable to Hackney residents and tenants on moderate incomes.
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“The presumption towards granting planning permission for them would systematically force out more genuinely affordable types of housing such as shared ownership.
“Based on the current average price for a flat in the borough, the council estimates a household would need an income of £71,000 to fund a mortgage to buy an average starter home, compared to the average household income of £33,400.”
The bill would also force councils to charge market rents to households with incomes more than £40,000 in London, also known as ‘Pay to Stay’.
The threshold is just above the average Hackney income, and Cllr Glanville said two cleaners working for Hackney Housing would exceed the cap.
“‘Pay to Stay’ will act as a disincentive to aspiration amongst tenants, as higher paid employment could result in a huge and unaffordable hike in rent of around 300pc in Hackney,” he said.