Fair to Middling: Report of the Commission on Intermediate Housing

This report looks at whether housing for working people with modest incomes in London can be improved and if so, how.

People on modest incomes make an indispensable contribution to London life and to the London economy in particular. Yet the city is not working well for them. Living costs have gone up fast. Competition for work can be fierce, driving down wages, especially for low-to-middle income earners. Housing is a particular challenge.

This new analysis shows that even the cheapest Outer London boroughs are now close to unaffordable for first-time buyers with ordinary jobs.

The result has been a dramatic increase in people on modest incomes living in privately rented accommodation, including an increase in families with children. Almost half (48%) of London households aged between 25 and 34 were renting privately during 2013/14 compared to 21% per cent in 2003/04.

Making the case for intermediate housing

The intermediate housing market has developed in a largely non-strategic way, thanks to the introduction of new policies and products by successive governments since the first intermediate home-ownership markets appeared over 30 years ago.

For this reason the Commission spent some time discussing the purpose and justification of sub-market housing catering to people on modest incomes. After all, while we all want to see more housing in London that is affordable to people on modest incomes, a sceptic might ask how we can justify spending tax-payers’ money on subsidising it when there are so many other demands on the public purse.

Government is introducing the most fundamental reforms to affordable housing in a generation. The implications for London are far from clear, but the Commission urges government to ensure that reforms do not result in a decline in provision of affordable housing in London, including housing for those on modest incomes.