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Brick by Brick’s shared ownership flats are far from affordable

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CROYDON COMMENTARY: The council has been accused of hiding behind statements that promise “affordable” housing. NIX GLOVER has done some digging to see just how unaffordable such housing can really be

Flats which can be bought under ‘shared ownership’ are often only ‘affordable’ if you are earning a significant salary

Croydon Council say they are building affordable homes, they are required by planning law to ensure that all projects over a certain size contain affordable housing, so whether the council via their company Brick by Brick are building them or an independent developer does it, there should be housing for every budget.

So is there?

According to figures provided by Croydon Council in a Freedom of Information response last November, the total number of units Brick by Brick is proposing to build is 756.

Of those, 488 – 64 per cent – are to be sold on the open market, at market rates, including most, if not all, of the wheelchair-adapted units.

According to the council’s own figures, only 60 of these 756 units – less than 8 per cent – will be for affordable rent.

The totals, and proportions, have shifted a little since the council answered the FoI. In the company’s business plan, approved by the council cabinet earlier this month, there was no breakdown provided of the number of units for affordable rent.

But much of what Brick by Brick is proposing as “affordable” housing depends on homes that will be sold and rented as “shared ownership”. But at what price?

I took a look at some typical “shared ownership” properties in Croydon to get a feel for how these arrangements might be structured. It may not be exactly the same as any of the schemes which Brick by Brick say they are building, but it provides an illustration of how much a share ownership flat might cost.

A property of only 76m² is currently on offer in Coulsdon. It has two bedrooms (one with en-suite shower room), a bathroom, an open plan kitchen-living room, balcony and parking space. It’s current market value is £340,000.

This property is available as shared ownership, so you can own 45per cent of it for £153,000.

But you then also have to pay rent of £408.52 per month.

So if you get a mortgage with payments of £800 per month, it will cost you £1,208 per month.

Who can afford that?

The average wage in Croydon is £33,000, or £2,143 per month after tax.

If you subtract the cost of your home, that would leave you with £935 per month for Council Tax, utilities and other costs. Not forgetting that you still have to pay the annual service charge of £141.25 and any maintenance charges on your newly, part-acquired shared ownership home.

If you are a couple, and both working, then you can probably afford it, and maybe even own a car to put in the parking space. But if you decide to have children, with the costs that come with them, you may struggle.

But what if, say, you are a single parent earning the minimum wage, and are unable to work? Or if you are disabled and are on benefits?

A monthly mortgage-rent payment of £1,200 is nearly impossible. No benefit pays enough for a mortgage of £150,000. The Greater London benefit cap for a couple, with or without children, is £23,000. And while some benefits are not counted for the cap, even the maximum PIP payments are only £7,337 per year.

The local housing allowance for two bedrooms is only £939.86, but they won’t give you housing benefit with the mortgage.

So how could you ever afford one of these “affordable” homes?

Nix Glover, who has worked at Nestlé and in Purley, is a member of the Brick by Brick Action Group which organised the Town Hall protest at Monday’s council meeting


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