Town hall plays Robin Hood by giving away would-be government money to fund council homes in Hackney
- Credit: Archant
Hackney Council is playing Robin Hood by turning expensive homes into social rent ones using money it would otherwise have to give to the government.
Cash from Right to Buy sales must be spent within three years or given to Whitehall, with interest.
To make things harder for councils, only 30 per cent of housing projects can be paid for out of the receipts.
As a result, Hackney has a huge pot of money – £16million – it cannot spend.
But rather than hand it over to the Tories, mayor Phil Glanville is offering it to housing associations, as long as they use it to build social or living rent homes in the borough.
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And that’s what has happened at Selsea Place in Dalston. The Fairview New Homes private development’s affordable housing quota wasn’t really affordable.
The homes were set at 80 per cent of market rent, a definition dreamt up by Boris Johnson during his time as mayor.
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So the town hall used some of its pot of Right to Buy cash to give to Newlon Housing Trust, which is running the affordable homes on the site.
The £945,000 injection will allow the homes to be rented out at £820 a month, rather than £1,200. That will save families nearly £400 a month and £4,500 a year on rent.
Mr Glanville said: “While I’m proud that Hackney is building thousands of new council homes, it’s vital housing associations and other providers play their part in responding to the housing crisis by building more social housing.
“I’m delighted Newlon are doing just that – and our funding will ensure these homes in the heart of Dalston are at a genuinely affordable social rent for families most in need of somewhere to live.”
Newlon business director Caroline Pennock, added: “We are really pleased to be working with Hackney Council to provide more new affordable homes for local people and to reduce rents, which is great news for residents.”
Seven homes being built by Islington and Shoreditch Housing Association in Hackney Central were the first to see rents lowered through the Mayor of Hackney’s Housing Challenge fund earlier this year, and are expected to be completed in 2019.
Rising land values and changes in government policy mean without council support, fewer than 300 homes are expected to be built by housing associations in the borough in the next two years – a 90% drop since 2011.