Partner Article

Private sector’s moral obligation to support affordable housing

With average private rental fees in London now at £1,5431 a month, families and hard-working Londoners are being priced out of the capital.

Immediately after he took office, London Mayor Sadiq Khan asked officials to produce an urgent audit of City Hall’s preparedness to deal with the housing crisis. The study revealed that just 4,880 new affordable homes would be delivered this year; the lowest number since records began in 1991.

Post Brexit, the housing market is looking bleaker still. Despite prices beginning to cool, poor exchange rates make UK properties attractive purchases for foreign investors; notorious culprits of high rental prices.

Meanwhile, private builders are scaling back new developments, due to profit fears. This is likely to impact those in need of affordable housing the most, as the help-to-buy scheme favours those who purchase new builds.

Khan aims to tackle the housing crisis head-on, but these plans will take time to form and implement. In the meantime, people are spending more than half their wages on rent.

The problem is not limited to London as cities across the UK are in a similar situation. In June, national housing charity Shelter warned more than 148,000 renting households were at risk of losing their homes between April 2015 and April 2016. Shelter also reported an increase in the volume of people coming to the charity for advice on the threat of eviction.

It is clear that we can no longer sit back and wait for the affordable housing shortage to fix itself. In the midst of this crisis, the private sector is uniquely placed and arguably has a moral responsibility to step up to help.

Through working with local authorities to invest in affordable housing, businesses can help to address the shortage and reap the benefits to them and their stakeholders. First is the positive outcomes are threefold: there’s the intrinsic value of close community ties and positive public perception.

Second there’s providing homes for employees to cut down commutes. Finally, there’s the financial benefits achieved through an increase in property values, especially whilst bank deposits and savings are yielding such small returns due to low interest rates.

Local authorities are too happy to work with private companies to bring these projects to fruition. In 2015 Croydon Council launched its empty homes campaign to identify, free up, refurbish and rent out properties that have been empty for more than a year.

The aim was to increase the supply of affordable rental properties in Croydon, help cut the number of families living in bed and breakfast accommodation and reduce the blight of empty homes on the local area.

The Monarch Partnership recently worked with Croydon Council to purchase and revamp 16 homes in South Croydon as part of this initiative. We then donated the use of the previously derelict homes to the local council, which only has to pay a minimal management fee for a tenant’s use of the properties.

The handover was attended by Councillor Alison Butler, Deputy Leader of Croydon Council and Cabinet Member for Homes, Regeneration and Planning. She commented: “One of our biggest challenges is providing more Croydon families in need with better-quality homes while managing with less money. So on top of creating our own development company bringing forward thousands of new-build properties, partnerships like this one are important to meet our housing supply needs.”

For companies not in a position to purchase and manage a property portfolio, there are options. For example, we work with a number of local authorities and banks. We have also established an ethical investment fund to provide affordable housing for those in need, whilst generating a guaranteed above interest rate return on investment. The fund is FCA regulated and investments are protected.

With the immense benefits to both private sector and the local communities, a company’s involvement in reducing the affordable housing crisis should be a no brainer. It is possible for big business to put people first, support communities and improve quality of life for everyone.

This was posted in Bdaily's Members' News section by Arjan Dosanjh .