Last weekend a group of young professionals, forced by a spiralling housing market to rent rooms in shared houses at exorbitant prices, moved into a new development in London’s Stratford East — an area booming in the wake of the 2012 Olympics. To mark their arrival, they held a housewarming party.
But these youngsters had not rented their own home in Stratford. Instead, the group of housing campaigners had entered the development to hold a party in protest at the government’s failure to tackle the rising cost of rent — and role of social landlords in that failure.
The development in question was an apartment block designed for private rent on the open market, but built and managed by Genesis Housing Group, a social housing provider. Rents on a two-bedroom property reportedly start at £1,700 a month. Based on affordability criteria set out by housing charity Shelter (roughly, that housing costs should only consume 35 per cent of take home pay) these properties would only be affordable to families with an income of £76,000.
This is not the first housing protest that London has seen, and direct action will rise in line with rents. But it is arguably the most important: it is the first indication that social landlords may be conspiring in their own demise.
Genesis is one of 15 largest social housing providers in London, which together are preparing to build 4,000 properties for market rent and more than 1,000 for outright market sale. And like many others, Genesis has now opted to take advantage of a £1bn government funding pot to help build more new homes especially for private rent.
Social landlords claim they have an important role to play in this sector — they offer stability and security with lengthy leases so renters can bring up families in their homes, they are experienced and trusted landlords and will use the profit they make on private rent to cross-subsidise social housing.