Councils take on Boris and Lose over 80% Affordable Rents

Ref. London Borough of Islington & Ors v The Mayor of London [2014] EWHC 751

A group of nine councils have lost a High Court challenge to the Mayor of London’s plan to allow ‘affordable’ rents in new housing to be set at 80% of the market rate.

The challenge was led by Islington Council and included the councils of Camden, Enfield, Greenwich, Lambeth, Southwark, Hackney and Tower Hamlets, who claimed that rents set at 80% of the market rate would be unaffordable for local people. The councils also argued that they had typically been able to insist on social rents at around 30-40% of market level.

On the 11th October 2013, Boris Johnson decided to publish certain Revised Early Minor Alterations (REMA) to the London plan which the councils applied to quash in London Borough of Islington & Ors v The Mayor of London [2014] EWHC 751.

Their argument focused around the claim that the provisions of the REMA unlawfully precluded them from imposing borough-wide caps on rent for affordable rented housing. This was, however, rejected by Mrs Justice Lang who stated:

In my judgment, the real issue in this claim is a profound disagreement between the claimants and the defendant about economics, planning and housing policy. All parties agree that more affordable rented housing is needed in London, at levels below 80% of market value, but they disagree about how best to realise this aim.”

“The claimants wish to have power to introduce local planning policies imposing rent caps on affordable rented housing at levels below 80% of market value; low enough to make the housing affordable to a wider class of potential tenants. The defendant considers that rent control imposed via the planning system will compromise his policy to maximise the provision of affordable rented homes, by rendering delivery of new housing units unviable for developers and registered providers.”

The High Court judge concluded that the defendant was exercising his statutory powers to make a series of policy and planning judgements and, contrary to the claimants’ argument, the Mayor was entitled to have regard to the views of the Secretary of State and other ministers on whether the REMA was consistent with the National Planning Policy Framework (NPPF), which in her view did not disclose any errors of law.  

The claimants on the other hand were unable to establish that the Mayor’s strategy was contrary to the NPPF. The points raised by the claimants about land values, the difficulty of persuading developers to accept lower rents and the uneven distribution of affordable rented housing across London were “reasons for disagreeing with his strategy, not grounds for finding the strategy unlawful,” said Judge Lang.

However, despite the ruling, the fight for affordable rents across London goes on as Cllr James Murray, executive member for housing and development for Islington Council explains:

“The judgment does recognise that boroughs can keep fighting for lower rent levels in individual developments, particularly where there’s no funding from the Mayor, and so it looks like there will be many more battles to come”

BT/SRJ                                                                                                                        08.04.14

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