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And 198 new flats at West Hampstead Square

Housing targets 90 percent fulfilled with 14 years to go!

Last week we looked at job creation in West Hampstead. This week, we turn our attention to housing.

In the London Plan 2016, West Hampstead is glamorously referred to as “Area for intensification, number 45”. The original designation dates back to the time Ken Livingstone used to commute to City Hall via West Hampstead and no doubt saw all this space around the railway tracks. The “intensification” was to increase housing by 800 new homes and jobs by 100 in the Growth Area, mapped below.

In 2015, Camden confirmed these numbers in its own plan for  the West Hampstead Interchange over the following 16 years, though this is substantially lower than the number outlined in its 2010 Core Strategy document, which was 2,000 new homes but was then scaled back to 1,000. The “Interchange” is almost exactly the same as the growth area.

It is not clear who originally drew the outline of the Growth Area, and why, for example, it didn’t include the council-owned light industrial site  Liddell Road.

WH Growth area2

In early 2017, how is West Hampstead progressing towards this housing target?

Nido. The student housing on Blackburn Road immediately presents a challenge. It has 347 beds but unless you really stretch the definition of a “home”, that does not really equate to 347 new homes. A better measure, though not perfect, is to look at it as 39 shared-flats and 52 studios = 91 units.

Asher House. Next door to the student housing is the former Accurist offices, which was fairly quietly converted to residential under a government scheme to speed up planning that improved the valuation of the building without including any affordable housing. It was converted into 25 units, however, it is possible that it may be fully redeveloped in the future, which would be likely to add a couple of stories.

West Hampstead Square. If anyone ever actually moves in, then its seven blocks contain 198 units (145 market, 33 affordable rented, 20 shared ownership).

156 West Lane. The Travis Perkins building that’s just been given the go-ahead for redevelopment will have 164 units (85 market, 44 affordable rent, 35 shared ownership).

And 198 new flats at West Hampstead Square

And 198 new flats at West Hampstead Square

That’s 478 units so far within the Growth Area, but there are a number of large developments that fall just outside the Growth Area, but at the same sort of density. Should they be included in the targets? We are talking about large-scale dense developments on the fringes of the growth area and whose residents will certainly be gravitating to West Hampstead for their transport needs in particular.

Liddell Road. The largest of these developments, Liddell Road includes 106 units of housing to sit alongside the school (indeed, paying for the school). Just four of these units will be at affordable rents.

The Residence. Next door at 65-67 Maygrove Road, this scheme includes 91 units (79 market, 4 shared ownership, 3 social rented and 5 affordable rented).

The Ivery & The Central. The old Iverson Tyres site has 19 units (15 market, 2 shared ownership, 2 social rented) while the former garden centre site next door has 33 units (23 market, 7 socially rented, 3 shared ownership).

Adding these additional 249 to the 478 gives us 727 housing units – 90% of the housing target for 2031!

There are at least three other sites in the planning pipeline, although progress is slow and final numbers speculative.

11 Blackburn Road. This attractive but run-down Victorian warehouse had a planning application for six 2-bed houses and the conversion of the main warehouse into B1 employment space downstairs with a couple of flats upstairs. Nothing seems to be happening with this at the moment, but there’s a potential 8 units.

14 Blackburn Road. Way back in 2004, permission was granted to redevelop the Builders Depot. This was for two 4-storey blocks, one with employment space and one with 8 houses and 6 flats, plus underground parking. This permission has now lapsed so would have to be renegotiated, but these 14 units, would likely be the minimum of any new proposal.

Finally, Midland Crescent. That’s next to the O2 centre on the Finchley Road – which still counts as the West Hampstead Growth Area. This has been refused planning permission three times. The latest proposal included student housing, private housing, a shop and employment space. Again any estimate of potential is speculative, but the latest application would have delivered 40 units.

That’s a potential extra 62 new units within the growth area, but on top of that there are other sites that could be – and in some cases will be – redeveloped for housing: The Taveners Yard on Iverson Road, the Paramount carpark and – the big one – the O2 carpark.

At the workshop on the 02 carpark, there was talk of 300 new homes as well as employment and retail space. In one fell swoop West Hampstead could soar past the 1,000 new homes target. Maybe then, the tube station would finally be decreed worthy of an upgrade. Maybe.

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West Hampstead’s housing bubble: Deflating not bursting

If the bubble were a balloon then it hasn’t so much burst as been untied and blown around the room deflating and losing all forward momentum and energy over the last few weeks.

All of the industry heavy-weights and recent press coverage are reporting falls in asking prices and buyer demand across London; West Hampstead is no different. Rightmove has reported asking prices in London now at a virtual standstill for June and July, although it says prices are up 14% year on year. Sequence reports a month on month fall in June of 14% for new applicants whilst a Hometrack survey of Estate Agents in July tells us that house price growth in London has slowed ‘dramatically’ and is the weakest in 18 months with agents finding it “hard to push prices in the face of weakened demand”.

The Hometrack findings seem alarmist and in my opinion, simply mark the end to ‘open day frenzy’, ghost gazumping (being forced to raise your offer due to the increasing market alone) and ‘sealed bids’, which is no bad thing. It feels like the market has stopped off at the service station whilst affordability and common sense catch up.

There is no doubt however that demand has fallen significantly over the last 2 months and the question most buyers and sellers are now asking themselves is whether this is a seasonal blip or a longer term trend. The reasons for the slowdown in demand have been well documented and speculated about over the last few months; stricter lending affordability stress testing for mortgage applications introduced from the MMR, the spectre and inevitability of rising interest rates, the strong pound making London property less attractive to overseas buyers, next years’ election getting closer, press speculation over the ‘London bubble’ and strategic rhetoric from Mark Carney. All of these factors have combined to alter buyer sentiment to a ‘wait and see’ view rather than the bun fight that epitomised recent months.

There is, however, one overriding factor driving the London market and that is the supply of property and land compared to the increasing population and long-term demand, which must mean that prices will continue to rise over the long term although hopefully in a more controlled and steady way. We are anticipating a quiet summer with little or no growth in asking prices followed by a return to a more normal market in September.

In an earlier Property News this year I wondered what tools Mr Carney had available to him other than interest rates to control the UK housing market. We now have our answer and they have been very effective and imaginative tools. If we have successfully avoided the ‘boom and bust’ of previous attempts it looks like the UK housing market could be in very good hands. All we need now is to sort out the planning system.

On a separate note, I noticed that soon after the last Property News ‘Build high or fiddle while Rome burns’ Camden Council has announced plans for a 14-storey tower block at the Liddell Road site. I was surprised at the amount of objection to this proposal. A much needed development that provides a school and one- and two-bed flats close to transport links at no cost to the taxpayer seems like a good idea for West Hampstead. Surely, it is only with the increase in supply of new homes that we can hope to make London affordable for future generations of key workers? Light industrial sites close to railways make ideal sites to build high with the least impact on surrounding conservation areas or green belt land further out.

Darryl Jenkins
Associate Director
Benham & Reeves
West Hampstead
020 7644 9300
Follow @BenhamReeves

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The surprisingly large 156 Wes End Lane site

Affordable housing for 156 West End Lane

The surprisingly large 156 West End Lane site

The surprisingly large 156 West End Lane site

The proposed redevelopment of Liddell Road includes 105 flats of which precisely none are currently designated for affordable housing. Camden’s policy is that 50% of floorspace in any development of more than 50 units should be affordable (although understanding what affordable means in practice is not easy, as we’ll see later).

Why then does a development Camden is pushing itself have no affordable housing when its own quota is 50%? The council argues that it’s to pay for the school that will also be built on the same site. This starts to make more sense, although critics have pointed out that Camden is set to make a £3m surplus from the redevelopment and is redirecting central government funding of £6m – specifically earmarked for schools – to other parts of the borough.

Camden’s other argument is that the redevelopment of another large site it owns – 156 West End Lane, aka the Travis Perkins building – will reach the affordable housing quota. You can see the Twitter conversation where Cllr Phil Jones confirms this.

50 percent tweet

It doesn’t take a genius to work out that one development meeting quota doesn’t offset another that doesn’t; however, if you are prepared to accept the argument that the market rate housing pays for the school then it’s a lot better than nothing.

The challenge is that the 156 West End Lane plans are still some way off and plans can change – as we’ve seen with Liddell Road.

Liddell Road proposal from last year (acknowledging it might change)

Liddell Road proposal from last year (acknowledging it might change)

Revised Liddell Road plan with 14-storey tower block

Revised Liddell Road plan with 14-storey tower block

The Travis Perkins site has been sold to a private developer (sources tell me for “top dollar”), it will be interesting to see how Camden plans to enforce that 50% quota. Failing to do so would continue to propel West Hampstead down a track of becoming an increasingly homogenous affluent youngish community.

Many might think that sounds quite nice. Others might think that the best communities are those that are more mixed, offering suitable employment and accommodation to a wide range of people. There is a risk that the existing council estates in the area become more marginalised, that any sense of social cohesion is eroded and that the services and shops in the area cater increasingly for one – well heeled – section of the community only. Bear in mind that a key tenet of Camden’s core strategy is that it aims “to minimise social polarisation and create mixed and inclusive communities across Camden”.

TravisPerkins

Still empty above the ground floor

Underpinning much of this is the question, “what does affordable mean?”. It’s a simple question that turns out to be almost impossible to answer in a way that means much to most people.

Lets look first at the definition, then at the types of housing included and then at what the catch-all term “affordable housing” means in terms of actual units built on the ground.

What’s “affordable”?

Affordable housing should:

  • meet the needs of households whose needs are not met by the market and who are eligible for affordable housing, and
  • be provided at a cost they can afford, taking into account local household incomes and market housing costs, and
  • be affordable to future households unless arrangements are in place for subsidies to be recycled into alternative affordable housing provision.

Three types of affordable housing

Social rented housing is primarily housing managed by local councils and housing associations. The cost of social rented housing is controlled by a national rent regime. Other affordable housing providers may manage social rented housing under the same rental arrangements. This is what most people think of as “council housing”.

Intermediate affordable housing costs more than social housing but less than equivalent market housing. Camden controls the cost of intermediate affordable housing taking into account market costs and the eligible income groups. The Mayor’s February 2011 review indicated that eligible households were those with incomes of less than £64,000 per year (gross). The draft replacement London Plan indicates that he intends to raise the eligible income to £74,000 per year for intermediate affordable homes with 2-bedrooms or more.

How does income covert into housing costs? At the moment, in London, intermediate affordable housing should cost no more than 3.5x the household income threshold to buy and no more than 40% of net household income including rent and service charges.

Most intermediate affordable housing in Camden has been provided by housing associations. Intermediate affordable housing can include a range of tenures such as: rented housing, shared-ownership housing (where occupiers buy a share and rent the remainder) and low cost homes for sale.

Affordable rented housing means rents up to 80% of market levels, although the individual housing associations that manage this sort of affordable housing set their levels. Clearly, 80% of market levels is still far too high for many people. The Valuation Office’s October 2013 data put the average monthly rent of a 3-bed house in Camden at £2,976, 80% of which would be £2,380 – well beyond the reach of many.

Affordable rent was introduced as the grant available for affordable housing development for 2011-15 was halved from its previous level. It allows social housing providers charge up to 80% of market levels, and use the increased rental income to support additional borrowing to compensate for reduced grant.

Housing associations operating in areas with high land and market rental values such as West Hampstead will often have to manage affordable housing developed as part of private developments rather than developing their own – as is happening at West Hampstead Square, for example.

The associations have to cover their costs, so in expensive areas, they may be forced to charge the maximum 80% level, even though that is still a high absolute amount.

What does it mean on the ground?

Camden has changed its affordable housing quota recently. It used to be 50% of floorspace in any development of more than 10 units had to be “affordable housing”. It’s now moved to a sliding scale so 50% of any development of more than 50 units must be affordable, 40% of developments of more than 40 units, and so on.

In terms of the split between the various types of affordable housing, this has changed to 60% social rented and 40% intermediate housing, down from 70/30. This is, says Camden, because it believes that just over half of Camden residents in need of affordable housing could afford intermediate housing.

Further reading

No-one would pretend this was a simple topic to understand, and with national, city and borough policies to take into account, it’s impossible to say “affordable housing = x thousand pounds”.

If you want to delve into more detail, then I suggest
Camden Housing Strategy 2011-16 , which is the most accessible document and sets out more of the context.
Camden’s Planning Guidance goes into more detail
The 2011 London Plan on housing explains the Mayor’s position
Camden Core Strategy CS6 (Housing) is the official policy document

153-163 Broadhurst falling down_ft

Housing: What the parties say

Housing – we need more of it, and it needs to be affordable for more than the highest earners. Not too many people disagree on that. How and where we deliver that is a different story and one that can be written at both the national, city and local level. At the local level, councils are also of course responsible for allocating and maintaining council housing and housing services.

Labour‘s very first manifesto pledge is to build 6,000 new homes – including council homes. It won’t introduce fixed-term tenancies and 80% market rates as long as it has that power. During the current administration, Labour has been selling off assets to fund schools and housing. The most obvious examples locally are 156 West End Lane (the Travis Perkins building) and the Liddell Road industrial estate. The party pledges to ensure that “developments led by the council deliver 50% genuinely affordable housing” (50% by floorspace is the existing target for any development in the borough). It also pledges to continue its reforms of council leaseholder and tenant services.

TravisPerkins

The Conservatives pledge to make the council’s housing and repairs services more efficient. Specifically they will change how maintenance and repairs are managed including using competitive tenders and reducing red tape. They will sell the freeholds of street properties that have more than 50% leaseholders and encourage right-to-buy. The manifesto makes no mention of additional or affordable housing.

The Liberal Democrats say they will take a proactive approach to creating new social housing, taking advantage of central government schemes and using planning powers to improve the borough’s housing mix and provide homes for young people at a price they can afford. They also want to give council tenants and residents associations a more active role in the delivery of repair and maintenance services.

The Green Party says it would “pioneer innovative models of housing, such a co-housing where individual units share facilities and social space” to keep housing affordable. Such housing would be a priority for new developments on council land. It would also create a register of good landlords to incentivse high standards.

UKIP, which doesn’t have a Camden manifesto but a generic local election one, says it will oppose the bedroom tax but provide incentives to re-use empty homes and that new housing should be directed to brownfield sites. It argues that ending “open-door immigration” would reduce the pressure on housing.

The TUSC, standing in West Hampstead, says it would prioritise the building of social housing including sheltered and accessible housing. It would also push for proper maintenance of current council housing stock by selecting a company that is sensitive to occupant needs/desires and able to provide quality for money. It would also work with developers to build sympathetic private properties of various sizes and that include affordable housing. It wants a register of local landlords and proposes rent caps for private tenants .

WHL perpsective: your reaction to these is likely to depend on your own housing situation and on the sort of communities you want to live in. If you believe that mixed communities are stronger and more interesting places to live than homogenous places then consider that (re)developments in all our wards should seek to improve the socio-economic mix. If you’re a council tenant then the issue may boil down to whether you think the current Labour administration has improved services to tenants or not.

MillLaneHouses1

Let us know your thoughts on the policies below and on what housing topics you think the parties should be concerned with.