Housing has raced up the list of financially critical services for councils in recent years, no more so than in London.
The umbrella organisation for the capital's boroughs, London Councils, has highlighted the worsening housing crisis its members are facing. It claims they spent £5.5m a day on homelessness in 2024-25 – up from £4.2m a day in 2023-24.
The bulk of this spending is going on providing temporary accommodation due to a lack of supply.
Inevitably, housing has proved a hot topic during the political party conference season.
Last week, shadow housing secretary Sir James Cleverly suggested affordable housing targets for new developments should be reduced as they are ‘so high' they prevent developments from being built.
A week earlier, Labour launched its New Towns plans, with housing secretary Steve Reed repeating his pledge to ‘build, baby, build'.
There is broad agreement that there is a housing crisis nationwide, with homelessness charity Shelter last year estimating that 354,000 in England were homeless or living in temporary accommodation.
London councils have been particularly vocal about the problem in the capital. Shelter has estimated around one in every 47 people in London are homeless.
Against this backdrop it is understandable that London's councils welcome any new government funding for more social and affordable housing in the capital.
London Councils' deputy chair and executive member for housing and regeneration, Grace Williams, greeted the recent £11.7bn of new central government funding by saying it would ‘support us to build more of the social and affordable homes that our residents are crying out for'.
Yet there is not universal agreement that just building more homes is the answer.
Former leader of Barking & Dagenham LBC, Darren Rodwell, has asked if the country really just needs 1.5 million new homes or if ‘something smarter' is needed.
Rodwell pointed out that when he was leading Barking & Dagenham, the council found that only around 6-7% of applicants on the housing waiting list fell into the two lowest income bands, meaning most households on the list were not in ‘deep poverty'.
This led the council to move towards a ‘build-to-rent' model, providing a range of rentals aligned with household incomes which created, said Rodwell, ‘a sustainable housing pipeline that didn't rely solely on grant funding or taxpayer subsidy'.
Rodwell concluded: ‘Barking & Dagenham shows that when you look at the numbers, innovation follows. A smarter, income-based housing mix can both meet need and create long-term sustainability. That may well be the blueprint for tackling the housing crisis nationwide.'
As Rodwell argued, this approach has allowed Barking & Dagenham to raise more revenue through rents to reinvest and help with providing more social and affordable housing.
With strict formulae determining how much councils can charge for rents, Barking & Dagenham has set up an arm's-length housing company (ALMO) to allow it to vary rental rates.
Other London boroughs, such as Westminster, Barnet and Sutton, also have housing ALMOs and many provide an element of housing mix, but research carried out by The MJ shows most local authorities in the capital, including Barking & Dagenham, continue to let traditional council housing on secure, lifetime tenancies. This, critics argue, risks the most in need losing out while better off residents continue to benefit.
The 21 London boroughs responding to a Freedom of Information (FoI) request from The MJ collectively manage more than 257,000 council homes. Some still manage significant numbers, with Islington, Lambeth, Camden, Hackney and Greenwich managing approximately 25,700, 23,300, 22,700, 21,400 and 21,000 respectively. And the percentage of council tenants on lifetime tenancy agreements at these particular authorities range from 100% in Lambeth to 88% in Greenwich.
This is despite councils having the freedom to provide fixed term tenancies following legislation enacted by the Coalition Government in 2012.
A House of Commons briefing paper in 2016 indicated that this approach was not unique to London local authorities, with ‘very limited take-up' across the country.
One of the few councils to have moved to fixed term tenancy agreements was Westminster City Council, which took up the opportunity in 2013. But, with Labour gaining control of the council in 2022, the new administration this year moved back to a policy of offering lifetime tenancies.
Westminster's leader, Adam Hug, has said the authority is giving residents ‘the long-term security they deserve'.
But for Paul Swaddle, Conservative group leader at Westminster, it is a question of fairness.
‘If we think there are not enough social houses, how can we possibly just give them away for life?' he said.
‘We should be helping those most in need [and] not creating a system where high earners can hold onto council homes for life, regardless of changing circumstances while others wait for years in temporary accommodation.'
It is not clear how many council tenants in London would be in a position to move out of social and affordable housing to accommodate those more in need, because none of the 21 councils responding to the FoI collect income information on households after they are granted a council tenancy.
It could be argued this is not surprising, given the nationally set rules prevent any change to rentals beyond the strict criteria controlled by government.
In addition, there is a belief within the sector that very few, if any, tenants in social or affordable housing are likely to progress onto high salaries – at least among new tenants.
As one person heavily involved in the social and affordable housing sector in London told The MJ: ‘Actually, in London, I would genuinely have a look at the kind of state people are in to get to the top of the housing waiting list now. I would bet my bottom dollar that not a single person who gets to the top will, in 10 years' time, be earning £70,000.' They add that the risk of losing their home would discourage people from ‘improving their lot'.
Nonetheless, there is a recognition that given the scale of the crisis facing the capital, a different approach is needed.
‘We need to think about what the different housing solutions for the capital are,' said one sector insider. ‘Solutions that make the capital continue to work and not become like a lot of European capitals where only very rich or very poor people live.
‘I think something which is about different products… where you can say, here's a social rent, here's an intermediate rent, here's a low-cost home ownership product like shared ownership – here's a range of things for Londoners to keep London mixed and vibrant. That is where we should be concentrating.'
Swaddle is also a proponent of intermediate housing and, while he claimed the current Labour administration at Westminster is reducing the offering of this form of housing, he argued that the neighbouring Labour borough of Camden is one progressing the approach.
Ultimately, there is likely to remain a consensus that more social and affordable homes are needed, but the argument seems set to rage over how this is achieved and what mix is provided.
