Rejecting affordable homes means Peckham will get no homes
Southwark council has rejected the redevelopment of the low-rise Aylesham shopping centre on the basis that it did not include enough affordable homes. This completely misses the point, says Jeremy Driver
London has England’s most acute housing shortage: the average rent for a one-bedroom flat is now around £1,500 a month, and the average home costs more than 12 times the average wage. Yet it is currently building fewer homes than almost any other major world city. The result is that people are priced out of the areas where they have built their lives.
I know, because it happened to me. For nine years, I lived in Peckham. My son was born there and for much of that time, I ran one of the busiest Scout sections in the borough, based in Peckham Rye Park. I loved Peckham, was an active part of its community, and wanted to stay.
But, like many people, I eventually found I could not afford to. So I moved further out, to somewhere my money could buy more.
That’s why I was so disappointed to see the planning inspector reject an appeal for the redevelopment of the Aylesham Centre in Peckham: a tired, low-rise shopping centre on a major town-centre site four minutes from a railway station. The scheme would have delivered 867 homes, including 77 affordable homes, alongside retail, leisure and commercial space.
Rejected
It was rejected because, in the inspector’s view, the benefits of 867 new homes did not outweigh the harm the scheme would do to the surrounding townscape and heritage assets. This is despite Southwark Council’s own 2022 local plan concluding that “development of up to 20 storeys could be appropriate in this location”.
But the heritage argument was not the only controversy. Much of the fevered campaigning against the scheme has focused on affordable housing. Comedians Nish Kumar and James Acaster even headlined a benefit gig opposing the development. Celebrating the Planning Inspector’s refusal, Southwark’s planning chair, Cllr Richard Livingstone, said that “those homes would have done nothing to meet local needs”.
But this argument misses an important point. Southwark’s own viability assessment of the Aylesham development accepted that the maximum viable affordable housing contribution was actually zero. This was not a choice between 77 affordable homes and a better scheme with hundreds more, it was a choice between 77 affordable homes and none. Families cannot live in a shopping centre.
Families cannot live in a shopping centre
Even that understates the benefits of schemes like the Aylesham development. In a city where development has all but stalled, market-rate homes, even “luxury flats” do help ease pressure elsewhere. That’s because of the moving chain they create.
When someone moves into a new flat at the top end of the market, they often leave behind a slightly cheaper home. Someone else moves into that, freeing up another home a rung below. And so on down the ladder.
Studies in Finland, Sweden, Switzerland and London have found that new market-rate homes trigger moving chains that reach down to lower-income households. In fact, the Greater London Authority has estimated that every one per cent increase in housing supply cuts prices and rents by around two per cent.
That matters because building is brutally expensive right now. Inflation and tight restrictions on land use mean developers often struggle to make schemes stack up, particularly when they are also expected to provide large amounts of affordable housing.
But moving chains are a reminder that affordability is not only improved by building homes officially labelled “affordable”. New market-rate homes also ease pressure elsewhere. They free up other homes, reduce competition, and help bring prices down.
Other cities have understood this better. Manchester has built far more homes in its city centre, including market-rate flats of the kind critics often dismiss as “luxury housing”. In the early 1990s, fewer than 500 people lived in Manchester city centre. Today, the figure is over 100,000. In a 2021 interview, Sir Richard Leese, the former leader of Manchester City Council, defended this policy bluntly: if the city had focused only on delivering affordable housing, it “would have delivered no housing at all, zero”.
If Andy Burnham is to be Labour’s future, the party should ask itself a simple question: does it want Manchesterism or Southwarkism?
Jeremy Driver is head of campaigns at Britain Remade