TOM COPLEY AM LONDONASSEMBLYLABOUR Working hard for Londoners Boris Johnson Mayor of London

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1 TOM COPLEY AM LONDONASSEMBLYLABOUR Working hard for Londoners Boris Johnson Mayor of London City Hall Queen s Walk London SE1 2AA City Hall Queen s Walk London SE1 2AA Switchboard: Minicom: Web: 17 February 2013 Dear Mayor Johnson, Re: consultation Draft London Housing Strategy I am delighted to respond to the consultation on the Mayor s Draft London Housing Strategy. Please consider the following response as being on behalf of all Labour Members of the London Assembly. 1. Overall housing supply targets 1.1 The increasing cost of housing is now the key driver behind the cost of living crisis affecting many Londoners. Fundamentally, this crisis has been caused by the failure over recent years to build enough homes to meet the needs of London s growing population. I believe, as do my colleagues on the Labour Group, that the housing shortage poses the single biggest threat to London s future economic prospects and it is our view that achieving a step-change in housing supply is now the key challenge facing London government. 1.2 The draft Housing Strategy sets a headline target to build 42,000 new homes every year in London for the next 25 years 420,000 new homes over the next decade and more than 1 million homes over the course of the next 25 years. 1 This figure, outlined also in the recently published Further Alterations to the London Plan, is based on assumptions of land capacity as assessed by the Strategic Housing Land Availability Assessment (SHLAA) This new target represents an increase from the 2011 Replacement London Plan target of 32,210 new homes per year. This increase has been made possible because of a recalibration of London Plan housing density policies, which now allow for higher density housing development in outer- London town centres with good transport connectivity While the provision of 42,000 new homes per year may maximise land capacity, the Mayor s target does not seek to address the full level of housing need in London. The Strategic Housing Market Assessment (SHMA) found a need to build 49,000 new homes per year if London s housing shortage is to be addressed over a longer period of time ( ), while addressing need over a shorter time-frame (between 2015 and 2026) would require a supply of 62,000 new homes per year Draft Further Alterations to the London Plan, Greater London Authority, January 2014, p.87 3 Draft Further Alterations to the London Plan, Greater London Authority, January 2014, p.97 4 Draft Further Alterations to the London Plan, Greater London Authority, January 2014, p.86 Direct telephone: tom.copley@london.gov.uk

2 1.5 Given the shortfall between the Draft Strategy s housing supply target and the actual level of housing need identified by the SHMA, the Mayor should publish evidence of the different density levels that would be required (within the confines of the preserving the greenbelt and metropolitan open land) to enable the delivery of between 49,000 and 62,000 homes a year in London. 1.6 The most recent London Development Database (LDD) figures show that total housing completions fell to 20,000 in 2012/13. 5 This is the lowest level recorded by the LDD since the database was established in 2004; a completions level lower than even during the financial crisis. This means that to attain the Mayor s target will require more than a doubling of current delivery levels. 1.7 The Further Alteration to the London Plan highlight that 55,000 homes have been approved each year since 2008, 6 a figure that effectively discredits the view that an overly prescriptive planning system is the cause of the current housing shortage. Instead, I would point to the twin factors of (a) insufficient availability of finance for developers and (b) the structure of the house building market, which requires developers to maintain unit values by limiting supply. It is because of these two factors that I believe the private market cannot be expected to deliver this near doubling of output alone. In fact, since the de facto prevention of the state (through local authorities) from house building was enforced in the 1980s, the level of house building has never been sufficient to meet housing need. To correct this failure and to ensure sufficient supply of new homes, the GLA should itself intervene directly in the housing market by establishing a London Housing Corporation to commission the construction of new homes. I believe this commitment should be included in the new Housing Strategy. 2. Affordable housing Social rent and Affordable Rent 2.1 The Draft Strategy outlines that the overall target to build 42,000 new homes should include: 22,000 homes for market sale; 5,000 long-term private rented properties; and 15,000 affordable homes 2.2 The Draft Strategy details that of the affordable housing element; 40% will be low-cost home ownership; 30% will be Affordable Rent charged at up to the maximum of 80% of market rent or within Local Housing Allowance caps; while the remaining 30% will be Affordable Rent housing capped at low affordable rents, and will be prioritised for those in the greatest need and those in low income employment (essentially, Affordable Rent charged at or around target rent levels) In total, the Mayor s targets outlines that he intends that only 10.7% of all new homes in London should be charged at or around social rent levels. This equates to just 4,500 new homes each year. 5 London Development Database 6 Draft Further Alterations to the London Plan, Greater London Authority, January 2014, p

3 2.4 I believe that such a low figure represents an abdication of the Mayor s responsibility for housing those on low-incomes. With private sector rents evermore unaffordable and Affordable Rent rents able to rise to a level unaffordable to even those on very high incomes (see appendix), 8 it is clear that the Mayor s Draft Strategy does very little to ensure a sufficient supply of new, genuinely affordable, housing for low-income Londoners. 2.5 It is also clear that the Mayor has no evidence to suggest his policy on Affordable Rent meets the needs of low-income Londoners. In response to a written question, the Mayor previously confirmed that the recent SHMA did not evaluate need for Affordable Rent at various rent levels up to the maximum 80% of market rent. 9 Instead, the SHMA has taken a broad assessment of what proportion of homes should be social rent (including Affordable Rent) 10 without any assessment simultaneously being made of how different (particularly higher) rent levels charged on such properties impact on the extent to which need is met. The Mayor cannot therefore justify his policy of splitting Affordable Rent into two categories, aimed at two distinct client groups, on the basis that it meets housing need, given that he has not assessed the extent to which the housing needs of various income groups is met by Affordable Rent when it is charged at the various rent levels. Family-sized housing 2.6 The Draft Strategy outlines that the capped 11 element of Affordable Rent (the element charged at around social rented levels) will, for this Spending Review period only, focus on delivering smaller units. This is to tackle problems caused by the bedroom tax and the shortage of smaller units available for those in under-occupying households to move into. 12 The discounted 13 element of Affordable Rent (the element allowed to rise up to 80% of market rent) will include a higher proportion of family housing (36% of all supply is targeted to be familysized) and will be targeted for those in work This is a change in policy from the current funding round, where family-sized affordable housing tended to be charged at or around social rent levels to ensure they remained affordable to tenants supported by Housing Benefit. It is also doubtful that family-sized Affordable Rent housing can be built in inner-london and charged at a level within the Coalition Government s new Housing Benefit caps. Instead, the Mayor s policy could incentivise the construction of family-sized affordable housing overwhelmingly in outer-london. To this end, the Draft Strategy is likely to erode mixed and balanced communities in London and reinforce trends in the private rented sector, where welfare reform has provoked the movement of low-income households who are supported by Local Housing Allowance from inner- to outer-london. 2.8 Given the implications for low-income Londoners, I, and my colleagues on the Labour Group, oppose the use of Affordable Rent in London. I believe the Mayor has not done enough to argue the case to the Government for investment in truly affordable, social rented, housing. As a result, 8 Joint Response to the London Plan Revised Early Minor Alterations, Westminster City Council, et al. 31 July 2012, p.10 9 Strategic Housing Market Assessment (3), written question 2013/3711, Nicky Gavron, Mayor's Question Time, Wednesday 23 October The 2013 London Strategy Housing Market Assessment, Greater London Authority, January 2014, p

4 it is disappointing that the Draft Strategy confirms that government has decided to maintaine the cuts to London s affordable housing budgets over the period 2015/18. Subsequent written questions to the Mayor have shown that this cut amounts to 16 million a year in the period 2015/18 compared to 2011/ It also means that London s annual budget will be 61% lower in 2015/18 when compared to the record breaking 2008/11 National Affordable Housing Programme that was agreed by the previous Mayor and previous Government. 16 Such cuts can only result in higher rents for social tenants or in a shift towards delivering more homes for low cost homeownership over social/ Affordable Rent. 2.9 The Draft Strategy reaffirms the Mayor s policy that family-sized housing constitutes three or more bedrooms. 17 This policy does little to incentivise the construction of affordable housing with four, five or even six bedrooms. This is despite the undoubted need for such larger properties. I believe the Draft Strategy should outline a set of separate targets for larger affordable homes above three bedrooms. Low cost homeownership 2.10 The Draft Strategy highlights a future drive towards increasing the number of affordable homes being built for low cost homeownership. The 2015/18 Affordable Housing Programme will increase the number of affordable homes for first-time buyers by 50%. Over the longer term, the Draft Strategy sets an ambition to double the supply of new affordable homes built for first-time buyers between 2015 and 2020, and to double this again by I, and my colleagues on the Labour Group, support an expansion in this supply on the presumption that this represents a doubling of total supply (i.e. as part of a doubling of overall, total, housing supply). However, it should not be the case that supplying low cost homeownership should be at the expense of delivering socially let affordable housing. The Housing Strategy should be explicit in outlining whether or not this pledge would result in a decrease in the provision of affordable housing to rent. Affordable Rent to Buy 2.12 The Draft Strategy says Mayor will also consider introducing a new Affordable Rent to Buy product, to give tenants a limited period of discounted rents to enable them to save to purchase their own home. I look forward to further information on this proposal being published in the future. Decent Homes 2.13 Similarly, I welcome further investment in the Decent Homes Programme and request further information on borough allocations from the GLA. 15 Affordable homes funding, written question 2014/0077, Darren Johnson, Mayor s Question Time, Wednesday 29 January Affordable homes funding, written question 2014/0077, Darren Johnson, Mayor s Question Time, Wednesday 29 January

5 Affordable housing allocations 2.14 In the Draft Strategy the Mayor seeks to redefine and influence allocations policy in London and signifies his support for certain government initiatives. In particular, the Draft Strategy: Encourages boroughs to give greater priority to low-income working households when managing their waiting lists. Will require between 5% and 10% of all affordable housing allocations to be shared on a pan-london basis, while housing associations will be able to retain a further 10%. Supports the government s ambition to charge market rent levels to social tenants with high incomes (the so-called pay to stay policy). However, the Mayor believes that in London this should be activated at an income threshold of 66,000 per annum for smaller households and 80,000 for larger ones, rather than at 60,000 as currently proposed by the government. Encourages housing associations to offer fixed-term tenancies as the norm, with lifetime tenancies issued only to the most vulnerable households I support the Mayor s attempts to retain a relatively limited number of affordable housing allocations for city-wide purposes. I believe that this could deliver benefits, for example, through more efficiently tackling overcrowding and housing vulnerable groups such as rough sleepers and those subject to domestic violence I also oppose pay to stay policies for social tenants and also disagree with the Mayor s attempts to encourage housing associations to offer fixed-term tenancies as the norm. The social sector should offer tenants the same security in their home as home owners enjoy. Not only is this good for the tenant, but giving council tenants a strong rooting in their local community is a positive thing for the local area. 3. Housing finance 3.1 I support in principle the Mayor s proposals for financing house building. I particularly support the proposed devolution of Stamp Duty receipts, the removal of housing investment from the public sector borrowing requirement and the pooling the borough s borrowing capacity (should the boroughs wish to). While I oppose the Help to Buy scheme on the basis that it fuels demand for housing while doing very little to increase housing supply, I would potentially support proposals that seek to increase supply by applying the Help to Buy model to development finance (depending on the detail of the policy). 3.2 I support a long-term national effort to refocus social security spending on capital investment in social housing as opposed to subsidising higher Housing Benefit expenditure on private rented sector and through the Affordable Rent tenure. 3.3 I also in principle welcome proposals for a London Housing Bank to finance large scale developments. I await further details of how this would operate and be financed. 3.4 More could be done to assist the London Boroughs to expand the supply of housing. Many boroughs such as Southwark, Camden and Hackney have made great progress in utilising to new freedoms afforded by recent reforms to the Housing Revenue Account. However, the arbitrary - 5 -

6 borrowing caps have limited councils ability to maximise house building. I support the Mayor s proposal to broker arrangements between boroughs and developers through the consolidation of investment into a single London-wide programme. I would encourage the Mayor to put forward proposals for how he proposes this system would work. 4. Private rented sector 4.1 The Draft Strategy reasserts the Mayor s long-standing policies to influence standards in the private rented sector, most prominently outlined in the Housing Covenant that was published in July The Covenant commits the Mayor to: Launching the London Rental Standard, which will essentially provide a mayoral stamp of approval for voluntary landlord accreditation schemes. Encouraging longer tenancies for families. Encouraging boroughs to share knowledge and intelligence about criminal landlords. 18 Encouraging employers to offer loans (up to 5,000) to employees to cover rental deposits. 4.2 The Mayor s position on the private rented sector is based entirely on encouraging landlords to improve standards in the sector and to voluntarily join an accreditation scheme. I, and my colleagues on the Labour Group, believe this approach is insufficient given the scale of the crisis in London s private rented sector and believe the Draft Strategy is unlikely to deliver the stepchange in standards that tenants crave. The Mayor has pursued this voluntary approach since his election in However, the approach has coincided with a period of worsening standards: Rogue landlord practices have become more commonplace, with Shelter reporting a 47% increase in private sector tenant complaints in London since One-third of London s privately rented homes more than 250,000 still fall below the Decent Homes standard used in the social rented sector, the largest proportion of any tenure in London. 20 Private sector rents have become even more unaffordable; rents were 11.8% higher in the first quarter of 2013 compared to a year earlier, standing at 1,250 per month. 21 This compares with gross monthly incomes of 1,093 a month at the national minimum wage ( 6.31 per hour) 22 and 1,482 on the London Living Wage ( 8.55 per hour) Any serious attempt to improve standards in the sector must address the imbalance in power that now exists between landlord/lettings agent and tenant in a market where supply is constrained. The most prominent example of this power imbalance is the ever-present threat of retaliatory eviction that hangs over tenants; a factor the London Borough of Hounslow has stated its 18 Homes for London: The London Housing Strategy, Draft for Consultation, November 2013, p Rent reform: Making London's private rented sector fit for purpose, London Assembly Housing and Regeneration Committee, June 2013, p Stressed: A review of London s private rented sector, Centre for London, August 2013, p Valuation Office Agency 'London Living Wage' increased to 8.55 by mayor, BBC News, 5 November

7 enforcement officers see with alarming frequency. 24 I believe that rather than engaging in superficial policy responses aimed at encouraging landlords to voluntarily improve standards in the sector, the Mayor should be using his office, influence and power to aggressively rebalance the rented market in favour of tenants (i.e. the consumer). 4.4 To this end, John Biggs AM, on behalf of the London Assembly Labour Group, recently submitted an amendment to the Mayors Draft Budget 2014/15, which requested that the Mayor initiates a number of fully-costed initiatives to empower tenants and help private landlords improve property standards. These included: Providing match-funding to London boroughs to employ an additional 32 environmental health officers to undertake checks and drive up physical and landlord standards in the private rented sector. This would add much needed capacity to London s stock of environmental health officers. A 2011 study by Brent Private Tenants Group found that in some boroughs, such as Bexley, there were as few as four environmental health officers working on enforcing standards in the private rented sector. Similarly, in Barnet there was one environmental health officer for every 4,667 properties. 25 Establishing an online, publicly accessible and widely publicised, register of London's bad landlords. This would seek to mirror a similar scheme established by the now Mayor of New York, which uses data from prosecutions and enforcement actions to map those properties owned by landlords engaging in rogue practices. This would also seek to enable tenants to input their own experiences (subject to appropriate legal criteria) into the online map in order to provide a much more in-depth report on London's landlords, which can provide more information to tenants and help readdress the power imbalance that landlords enjoy over tenants in a constrained market. Empowering private tenants by making funding available to establish private tenants representative groups in each London borough. There are currently a handful of such groups across London, but only two of these can be said to be firmly established. The proposal would make available funding to establish private tenants groups in each of the 32 London boroughs. This would be achieved by working in partnership with boroughs, striking an agreement whereby if the local authority makes office space available for a private tenants group, the GLA would meet the cost of two members of staff. Establishing a Mayor s Know Your Rights website for private renters, providing easily digested information for London renters, including advice about appropriate courses of action when dealing with landlords, tenancy agreements, repairs and deposits. This would be produced in collaboration with relevant charities and think-tanks and would be advertised using the Mayor's unique access to Transport for London advertising space. Producing proposals (to be taken to government for approval) for a new, single industrywide, ombudsman for the private rented sector. The proposals, which would be taken to 24 Rent reform: Making London's private rented sector fit for purpose, London Assembly Housing and Regeneration Committee, June 2013, p Information provided by Brent Private Tenants Group, January

8 government, would be able to effectively tackle rogue practices by landlords and letting agents and provide adequate protection for tenants from retaliatory eviction. Bringing forward a strategy for a PRS Decent Homes Fund a source of low cost loans for landlords that enables them to bring their properties up to a decent standard. This would be a revolving fund, which it is anticipate landlords would repay at a rate of interest linked to the Retail Price Index. Landlords would be able to access the fund if they are accredited by a landlord accreditation scheme approved by the London Rental Standard. This strategy, produced by GLA officers, would finalise policy details, giving particular consideration to the incentives needed to attract landlords into the scheme. It would also assess what finance can be attracted into the fund from the GLA as well as from sources such as private finance and central government funding. The strategy would also highlight how the fund would link with RE:NEW and whether additional finance could be attracted from the carbon reduction and insulation programmes operated by utility companies. The ambition would be to modernise at least 25,000 private rented homes each year 10% of the homes that currently fail to meet the Decent Homes Standard. 4.5 In addition, I believe the Mayor should bring forward proposals for rent stabilisation in London s private rented sector and seek the relevant statutory approval to pilot such a mechanism in London. This study should examine foreign comparisons most notably Germany and Switzerland where, contrary to the Mayor s opinion, stabile rent policies have resulted in much larger and better functioning private rented sectors than currently enjoyed by Londoners. 5. Fast-build energy-efficient housing 5.1 London needs to build homes and we need them fast. One way to get the housing we need quickly is to kick-start a pipeline of fast-build, modular, energy-efficient housing. 5.2 These homes are quick and cost-effective to build and develop, with building costs ranging from 10 to 22 per cent less than traditional build systems. A home can be constructed in a week and residents can put the key in the door within three months from start to finish, giving London an opportunity to get the housing we need quickly. These homes are also ultra-energy efficient; with design techniques that allow them to be built to Code for Sustainable Homes Level 4 or higher, they can reduce slash the annual energy bill of a family in a four-bedroom three-storey house by 1,000 to just Advances in technology and design mean these are not the boxy pre-fabricated houses of the past, but are high-quality homes precision-engineered and built to bespoke design. 5.4 Fast-build energy-efficient housing has the potential to create new sector of housing jobs, with jobs in manufacturing and assembly. One system already supports 350 jobs in seven factories around the M25 and training for skills development in the local college in Havering and apprentices on site. 5.5 The Mayor should use his land to kick-start a pipeline of fast-build, modular, energy-efficient housing in London. It is estimated that if the Mayor used 100 hectares of sites he owns across London for these types of projects, 14,000 homes could be up within eighteen months

9 6. Energy efficiency 6.1 I welcome the key policies outlined in the Draft Strategy that seek to improve the energy efficiency of London s housing stock, namely: RE:NEW continuing until at least Requiring boroughs receiving Decent Homes funding to also have plans for improving the environmental footprint of their stock. Requiring providers of affordable housing to undertake an environmental retrofit of their entire housing stock by Overseas investment 7.1 The Draft Strategy outlines the Mayor s support for overseas investment in London residential property and his view that it generates the upfront investment needed to get developments off the ground. The Mayor argues, however, that notwithstanding these benefits, new homes should continue to be marketed in the UK in the first instance, or at least simultaneously to overseas market I agree with the Mayor s view that homes should be marketed in the UK in the first instance (although the use of the word continue is deceptive, as many estate agents openly admit to advertising large proportions of their homes abroad in the first instance 27 ). However, there is insufficient evidence to support the Mayor s claim that overseas investment in London residential property is a positive thing. I am concerned that overseas investors may be displacing domestic buyers and forcing these people into unwanted extended stays in London s private rented sector. I am also concerned by anecdotal reports of the number of overseas investors who purchase property to use as a form of reserve currency and appear to leave their properties empty. 28 I therefore reiterate previous requests of the London Assembly that the Mayor commissions research into this practice. 8. Design Standards 8.1 I welcome the Mayor s commitment to maintaining London s housing design standards. London boasts some of the highest standards in the country on issues such as minimum space standards, Lifetime Homes, and water and energy efficiency. These policies are set out in statutory planning and housing strategies and policy documents, including the London Housing Design Guide, the Climate Change Mitigation and Energy Strategy, and the Climate Change Mitigation Strategy, and numerous supplementary planning guidance documents including the Housing SPG and the Sustainable Design and Construction SPG. 8.2 Worryingly, the Government s Housing Standards Review threatens to remove London s ability to set its own standards. If the Government remains wedded to its preferred option, London would only be able to set standards as set out by Whitehall, thus depriving us of the powers to require developers to build the high-quality decent homes Londoners need. Our standards work for 26 Homes for London: The London Housing Strategy, Draft for Consultation, November 2013, p.9 27 Foreigners buy nearly 75% of new homes in inner London, Financial Times, 3 August London for sale? An assessment of the private housing market in London and the impact of growing overseas investment, Smith Institute, July 2012, p.6-9 -

10 London, and the Mayor should work with Government to retain London s right to maintain and continue to set them. 9. Planning and land disposal 9.1 The Draft Strategy highlights a number of planning mechanisms to achieve an increase in housing supply. Most notably the Draft Strategy proposes to establish a small number of Housing Zones within Opportunity Areas. The full details of this policy are yet to be outlined by the Mayor, although I understand that it would attempt to unlock development through measures including targeted tax incentives, lighter touch planning and effective land assembly. I await the full detail of this policy. 9.2 The Draft Strategy says that the Mayor is likely to support any proposals which restrict or reduce the ability of developers to extend the life of existing, unimplemented, planning permissions. While not explicit, this appears to confirm that the Mayor still intends to introduce proposals, outlined in his 2020 Vision, for use it or lose it planning in London. I would support this proposal and believe it should be made explicit in the Strategy that this is what the Mayor is proposing. 9.3 The Draft Strategy reiterates the Mayor s policy that by 2016 all GLA-owned land will either be under development of have an exit strategy in place to allow for its disposal. While it is vital that the GLA land bank is utilised to address the capital s current housing shortage, I agree with the conclusions of the Budget and Performance Committee s Pre-Budget Report that : It is obvious that the GLA can only sell its assets once. Therefore it should also be actively considering leasing out its assets to generate on-going income streams that can support the GLA s activities for years to come. This would leave the GLA with the option to sell those assets at a later date if desirable. It also reduces the up-front costs of development for housing providers who do not need to purchase the land; this could allow previously unviable sites to be developed for housing. The GLA is considering this for a small number of its sites, and we would encourage it to look carefully at this option in all cases before it sells any more assets. 29 I would like to see revisions to the Strategy to establish a framework for land disposal that includes an automatic consideration of whether land should be leased rather than sold. If you would like further details on any of the points covered in this submission please contact me by ing tom.copley@london.gov.uk or by calling Best wishes, Tom Copley AM LONDONWIDE ASSEMBLY MEMBER 29 Pre-Budget Report 2013, London Assembly Budget and Performance Committee, December 2013, p

11 Appendix: Affordable Rent levels in London The below tables highlight the gross (pre-tax) household income required at a range of bedroom sizes in different boroughs. Affordable Rent is charged at up to 80% of market rent. The source is the joint response by London Boroughs to the examination in public (2012). 1 bed 100% 80% 65% RP EC Median Income Brent 36, , , , Camden 55, , , , , Enfield 34, , , , , Hackney 30, , , , Islington 62, , , , , Kensington and Chelsea 46, , Southwark 41, , , , , Redbridge 20, , , , , Tower Hamlets 36, , , , , Westminster 72, , , , ,000-32,000 39, bed 100% 80% 65% RP EC Median Income Brent 47, , , , Camden 74, , , , , Enfield 44, , , , , Hackney 42, , , , Islington 84, , , , , Kensington and Chelsea 53, , Southwark 54, , , , , Redbridge 28, , , , , Tower Hamlets 48, , , , , Westminster 102, , , , ,500-36,000 39, bed 100% 80% 65% RP EC Median Income Brent 60, , , , Camden 98, , , , , Enfield 55, , , , , Hackney 52, , , , Islington 104, , , , , Kensington and Chelsea 63, , Southwark 65, , , , , Redbridge 32, , , , , Tower Hamlets 60, , , , , Westminster 135, , , , ,000-39,000 39,

12 4 bed 100% 80% 65% RP EC Median Income Brent 81, , , , Camden 125, , , , , Enfield 70, , , NA 38, Hackney 69, , , , Islington 29, , Kensington and Chelsea 74, , Southwark 75, , , , , Redbridge 42, , , , , Tower Hamlets 67, , , , , Westminster 28, ,000-39,000 39, *100% denotes the annual household income required to afford market rent for this sized property. The 80% and 65% figures are given up to the LHC cap levels, at which affordable rents are capped. Where the LHA cap applies, this is denoted by an *. RP indicates the household income needed to afford current social rents. EC indicates the eligibility criteria sought by that borough, setting out the income cap, band or target which that borough considers is necessary to ensure the affordable housing product meets local need. Median income is the median gross household income across all housing tenures for that area. The figures above assume net income is 70% of gross and housing costs not exceeding 40% of household income. LB Southwark note they would usually use 30% rather than 40% in the affordable housing study and as quoted. Target rent is based on 2009/10, and median income on 2008 study, so both would be higher. All boroughs note that average incomes for council and housing association tenants is even lower than the median given above