A Great British Housing Crisis A generation is priced out of the housing market. So why doesn't the UK build more affordable homes?

A 'luxury ghetto' on the Thames

Jean Uzoma, a redoubtable 67-year-old community activist, lives in one of Europe’s biggest housing development zones close to the Thames in south London.

From Jean’s fifth floor balcony, imposing glass towers and cranes edge towards her estate both east towards Waterloo and Southwark and west to Vauxhall and Battersea.

As house prices and rents spiral, you’d imagine a huge housing project presents the perfect opportunity to address Britain’s affordable housing crisis.

But Jean sounds almost affronted when asked whether the thousands of newly built flats in her community will provide homes for her daughter’s family who were priced out of the area years ago.

“Don’t be stupid!” she laughs. “Nobody’s going to live there who comes from here.”

Less than quarter of a mile from Jean’s flat and running parallel to the River Thames is a 195 hectare muddle of arterial roads, elevated rail lines, offices, distribution businesses, data centres and council estates.

Known as the Vauxhall Nine Elms Battersea Opportunity Area (VNEB), London Mayor Boris Johnson has defined the VNEB as the largest remaining development zone in central London.

Between the vast, looming towers of Battersea Power Station and the forbidding, fast flowing road junction of Vauxhall, thousands of new homes and public spaces will, according to the Mayor, attract international investors and reinforce London’s status as a world city buoyed by the input of internationally renowned architects such as Frank Gehry.

Council officials sold the mammoth project to residents on Jean’s estate on the basis that over a third of the homes would be affordable. But, according to Bureau research, just 17% of the 15,000 VNEB homes currently in the planning process in the two London boroughs hosting the development are likely to be priced at below market levels.

At various times during the 43 years on her estate, Jean has chaired the tenant’s association, run the advice centre and acted as a trustee for both a neighbourhood law centre and a local adult education college – not to mention helping secure notable improvements to what once was a sink estate.

No shrinking violet and not one to throw in the towel, even Jean has given up fighting the developers and their plans for luxury homes.

“I tried in the past, along with some people in our Tenant’s Association, to block some of the planning applications along here. But you waste your time because even if we convince Lambeth and Lambeth refuses permission, the developers appeal and get it anyway. So what is the point?”

What’s happening to Jean’s community in south London is a story replayed across the UK and goes to the heart of Britain’s affordable housing crisis.

In England, there are 1.4 million households on council waiting lists – a 34% rise since 1997. This includes nearly 85,000 children living in temporary accommodation – equivalent to more than the entire population of the Hertfordshire town of Stevenage.

But against this swelling tide of humanity unable to secure a decent, stable home; the supply of affordable housing has gone into reverse.

Government figures project 42,710 affordable homes will be built in England in the year to April – the lowest number since 2006 and a 26% fall since 2010.

Affordable supply in Britain has never recovered from Margaret Thatcher’s flagship ‘Right to Buy’ policy, under which approximately two million council homes were sold at a substantial discount. Local authorities were banned from using the proceeds to replace council stock.

Since the Thatcher years, housing associations have been the main providers of homes for people priced out of the market. Some are colossal organisations with net assets worth several billion pounds. They earn substantial revenue from rents and many of them increasingly, develop homes for sale to the mainstream market.

To build cheap homes, housing associations have for decades relied on two things: an annual government grant worth billions of pounds and access to land

Today, however, the affordable housing sector has been winded by a double punch – one thrown by the Treasury, the other by the planning system.

George Osborne, in his 2010 Whitehall spending review, announced a 60% cut to the affordable housing grant. In June last year, the chancellor followed this with a further 2.2% reduction.

In return for the grant cut, the government has allowed housing associations to increase rents on their new build homes to 80% of market rents. These so-called “affordable rents” have replaced significantly cheaper, social rents. It means that in many areas, particularly in the south east, even affordable rents are out of reach of ordinary people.

To Jon Sparkes, chief executive of Crisis, the homeless campaign group, low cost housing providers are in danger of forgetting their core mission.

“Worryingly, we have seen a huge cut to the housing grant and woefully low levels of affordable homes being built,” he said. “Combined with ‘affordable rents’ of up to 80% of market rents, we are extremely concerned about the future of the sector as a whole.”

As housing associations adapt to a new cash constrained world, the other mainstay – affordable houses built by the private sector – is also in freefall.

DEVELOPERS often describe themselves as “place makers” and creators of “sustainable communities” in the beguiling language deployed by the industry.

But for the most part, the mainstream volume house building industry is a crude numbers’ game. If a stock market quoted company fails to achieve a gross margin of at least 15%, its shares generally dive making it vulnerable to a takeover from an industry rival or private equity group.

In the cut-throat house-building industry a company’s profit margin substantially improves if more units can be crammed on to a site.

First, however, there is a hurdle to overcome – the planning system. As a condition of securing planning consent, developers are required to meet a local affordable housing target.

The local affordable housing target is set by the individual local authority and is expressed as a fixed percentage of residential developments which should be affordable. The percentage varies from council to council reflecting the local economy and income levels.

In the immediate aftermath of the credit crunch when both mortgage supply and buyers dried up, many house-builders were glad to sell land to housing associations so they could build affordable units. It meant developers received housing grants from central government giving them welcome cashflow in a time of economic crisis.

But to the big beasts of the housebuilding industry, the financial crisis is now a distant memory. In fact, rarely have they had it so good.

In the past three years, the Bureau calculates the UK’s top ten builders increased their pre-tax profits by 180% from £566.7m in 2011 to £1.56bn last year. This year, the top ten housebuilders’ pre-tax profits are set to exceed the £2bn barrier for the first time since the peak of the last boom in 2006.

A combination of George Osborne’s huge housing grant cut and the house price boom means there is now little incentive for developers to build affordable homes.

It has got to the point that many housebuilders see affordable housing as a cost they need to control and reduce. In this market, they’d be stupid not to.

Luckily for the industry, the planning system provides a helpful escape valve: the affordable housing target is not a legally enforceable mechanism. It serves merely as guidance. It is trumped by national planning policy. This states that if a developer can prove building affordable homes makes a residential scheme financially unviable, the local authority’s target for low cost homes can be waived or reduced.

Housebuilders use what’s known as a financial viability assessment to prove a local authority’s affordable housing target makes their schemes uneconomic. The assessment lays bare to council officers the economics of a project – so long as the figures given by the housebuilder are accurate. According to independent experts who scrutinise the figures, often they are not.

The assessment works by subtracting a scheme’s projected cost, including a 20% profit for the developer, from its potential revenue based on current property values.

The resulting figure is called the “residual land value”. If there is hardly any difference between a site’s residual land value and its current value, developers argue it does not make sense to build the scheme – unless affordable provision is reduced. So assumptions on costs and revenues become critically important in assessing a scheme’s viability.

Yet surprisingly, many planning authorities appear to fail to check viability assessments as thoroughly as they might.

“The weakness in the viability system combined with the government’s cuts to the (affordable) housing grant regime, largely explains the current affordable housing supply disaster," said Christopher Marsh, a specialist planning adviser to local councils who has scrutinised hundreds of viability schemes.

It is almost unheard of for a financial viability assessment is made public. Developers are extremely reluctant to disclose them – even to councillors. They only tend to come to light if leaked.

So arguments over financial viability have become the new battleground on which local councils, developers and now increasingly, campaigners fight – with victory in very many cases going to the developer.

Sky High

Jean doesn’t get to see her grandchildren as often as she would like. With her failing sight, she can no longer drive the 40 miles to visit her daughter. There is very little chance Jean’s daughter could live near her mum in Lambeth – houses are just too expensive.

“My daughter’s been married 25 years in July and she’s had to buy a house in Luton. She couldn’t buy a house in London.”

Most of the new housing projects springing up in VNEB are not aimed at the local community. In what has become a property goldrush, many developers maximise their profits by building as many high-end units as they can, while often at the same time, completely legally, reducing affordable housing numbers.

The Bureau has investigated a large number of housing schemes over the past year, trawling through planning documents and legal agreements to work out how affordable housing is cut from major schemes. This is how one scheme saw its affordable units reduce.

In 2007, Frasers Property, part of a Singaporean-listed conglomerate, paid £6.47m for a disused data centre in the VNEB – less than two miles from Jean Uzoma’s estate.

A year later, Lambeth approved Frasers’ plans for a residential and office development in two new buildings – one a 36-storey tower. The Vauxhall Sky Gardens scheme included a 35% affordable housing quota – close to Lambeth’s 40% target.

But in 2010, the financial crisis prompted Frasers to ditch the office element of the scheme and increase the number of residential units from 178 units to 239. It proved a wise move given the way the London housing market was defying the downturn.

But despite strong demand from overseas buyers for housing, Frasers argued to Lambeth council that the effects of the economic downturn were so severe, it needed to cut its affordable housing quota from 35% to 25%. Lambeth council agreed.

But that was not the end of the matter. In February last year, as the London market was in overdrive, Frasers argued that the withdrawal of a £5.6m government housing grant meant not a single affordable home was economically viable. It said all 59 units had to be scrapped.

What happened next typifies how Britain loses vital affordable homes.

The Bureau has obtained the Vauxhall Sky Gardens affordable housing viability submission. These reports, on which vital decisions about affordable housing are made, are invariably kept out of the public domain.

The Vauxhall Sky Garden’ viability report states that the scheme had an average residential sale value of £612 per sq ft.

Lambeth’s viability adviser, BNP Paribas Real Estate challenged this arguing that the sale value should be 10% higher.

Additionally, Lambeth planning documents indicate that the viability report had placed too low a value on car parking revenue, off-plan sales and retail rents in its viability submission to the council.

So with a higher overall projected revenue, council planning officers argued the scheme could afford a 17% affordable housing quota.

Despite protests from two planning committee members who found it hard to believe 25% affordable housing on the site made the scheme unviable, the 17% compromise proposal was voted through by Lambeth in September 2013.

But Land Registry documents show that as council officials were negotiating with Frasers, the company was selling options on dozens of Vauxhall Sky Gardens’ flats.

And in November last year, just two months after planning permission was granted, it was reported that the entire development was sold off-plan.

Three people familiar with the London property market have confirmed to the Bureau that the entire luxury 239-unit residential scheme was indeed sold – at what is thought to be more than £800 per sq ft.

It means Frasers, according to Bureau calculations, is set to receive an estimated residential sales income of at least £126m. This is over £20m more than the figure indicated to Lambeth only ten months earlier when it was attempting to scrap all the affordable homes in its development on the basis that a £5.6m government housing grant was pulled. And in the end, Frasers reduced its affordable housing obligation by 18 units.

Frasers Property declined to comment on the gap between what it sold its flats for and what it told the council it would receive.

In a statement, the company said: “This site was bought in early 2007 and had stalled due to the global financial crisis, which led to severe funding restrictions required for the delivery of the project. The site had remained dormant since then, but with the improving residential market in 2012 an independent report from a highly respected third party was appointed to assess the financial viability at that time, with subsequent consultations with Lambeth Council's appointed consultants, BNP Paribas, to assess the affordable housing and employment provisions for this site.

"This resulted in an agreement to provide 35 rented affordable homes as well as six shared ownership homes. In addition, there is the provision of 3,250 sq m of new commercial space and 210 sq m of ground floor retail space generating employment for the local community. We believe this satisfactory outcome will provide the necessary homes, both for the community and the private sector, in an area that has seen substantial urban regeneration. Works have now commenced on site to deliver this project by 2016.”

In Lambeth today, there are over 15,000 households waiting for a home.

Opportunity Knocks

One of the most prominent developers in the VNEB zone is Berkeley Group Holdings, widely regarded as among the UK’s most astute and successful house-builders. The FTSE-250 company was founded, and is now chaired, by Tony Pidgley, a Barnardo boy adopted by travellers.

Berkeley entered the financial downturn eight years ago with a £260m cashpile after selling a north-west-based business. At the time, Pidgley, 67, told the City that Berkeley would use the cash to give his firm operational flexibility and in particular, focus his companies’ activities on the London real estate market.

As land values in London and the south east briefly plummeted in the immediate aftermath of the financial crisis, the tough-negotiator went shopping.

The rewards are now clear to see. Berkeley is one of the most important developers in the capital. Research by the Bureau has confirmed that Berkeley has five of the 15 housing projects currently planned in the VNEB area.

“Berkeley have been buying sites brilliantly,” a senior regeneration expert confided. "They bought a lot in the downturn at very good prices… They were big sites and no one else could probably afford them at the time because they were the only ones with cash. I expect they got good buys. By the time they serviced those sites and sold the plots off, they were likely well ahead.”

Berkeley Group’s five confirmed schemes in the VNEB area will eventually yield 2,957 new homes in total of which 22.7% or 673 units will be affordable. Though it is by no means the lowest provider of affordable homes in the development zone, not one of its VNEB schemes reaches Wandsworth’s or Lambeth’s affordable housing target. It’s a theme that runs across many of the company’s other developments in London.

One of Berkeley’s most prominent house building brands in the capital is St George. Like its parent, St George made healthy profits throughout the recession. Its published accounts show that in the eight years to 2014 its pre-tax margins average an exceptionally healthy 24.5% and its return on capital employed averaged 50%. Over this eight year period, St George accumulated after tax profits of £347.6m.

The company lists ten ongoing UK developments on its website including one in the VNEB area – the 48-storey The Tower, One St George’s Wharf by Vauxhall Bridge where a five bedroom flat was recently on the market for just shy of £20m.

According to planning documents, St George’s ten schemes will generate 9,114 new homes. Eight of these developments do not meet local affordable housing targets, with the number of affordable homes reduced after the developer cited financial viability issues.

In all eight of these viability assessments, local authority documents show that the councils accepted St George’s assessment and waived their affordable housing target.

Everything which St George has done is completely within the law and within planning regulations. Its parent company, Berkeley says the entire group of which St George is a member has in the past five years completed over 6,000 affordable homes which is equivalent, it says, to 10.9% of all the new affordable homes in London over this period.

Since 2009, the company says, it has also committed to deliver in excess of 8,000 additional affordable homes.

The Berkeley Group has committed a total of £333m in section 106 and Community Infrastructure Levy contributions over the last five years which is paying for a wide range of infrastructure and community facilities, from train stations to health centres and public parks to youth centres.

The company points out that planning regulations means each site is assessed on an individual basis and that it is wrong to compare a company’s overall pre-tax profits with the development margin on an individual site. It adds that each local authority “takes a view about where its priorities lie for allocation of Section 106 contributions when negotiating individual applications. Often, they will request a financial contribution or investment in infrastructure (through S106) rather than seeking to maximise the level of affordable housing to meet their policy target. That decision is theirs alone.”

Greg Fry, chairman of St George says: “Councils independently assess the viability of a project based on the site in question, regardless of who might develop it or how profitable they are. The profitability of the developer has no bearing on the level of affordable housing required on a site.”

This is precisely how the planning system works, but it is also precisely what some experts think is wrong with it: that there is a glaring incongruity that hints at a problem with the viability assessment itself.

Michael Edwards is the senior lecturer in the economics of planning, at University College London. “There are well acknowledged systemic problems with the viability system,” he suggests. “It is not functioning in a way that necessarily reflects economic reality. When developers make very large profits and yet cite viability as a reason not to build more affordable homes, common sense tells you there is an anomaly. And the public can’t test whether the assumptions contained in viability assessments are fair because the assessments are mostly confidential.”

Waterloo Sunset

Down the river from the VNEB, a battle is brewing over another residential development where a powerful developer could make an estimated profit in the region of £600m before it increases the number of affordable homes above 20% - half the local authority’s affordable housing target.

In 2011, a joint venture was formed between Canary Wharf Group, a multi-billion pound property investment firm backed by the Chinese state, and Qatar Diar, the real estate arm of the Gulf state’s $170bn sovereign wealth fund. Known as Braeburn Estates, the joint venture was selected by Shell to develop the oil giant’s historic headquarter site in the shadow of the London Eye.

With the London luxury housing market booming, Shell’s prime riverside location became an extremely lucrative site – especially if hundreds of luxury flats could be built on it.

By May last year, Braeburn achieved a significant breakthrough. The company secured planning consent from Lambeth Council, albeit by the slimmest of majorities, to create 779 luxury flats, 98 affordable homes for the elderly, new offices and shops.

Councillors gave the green light for eight new buildings, including three 30-storey towers, to be clustered around the existing, 27-storey Portland Stone Shell Centre.

In addition to 98 on-site affordable homes, Braeburn agreed to build another 70 social rent units on an estate two miles south of the site.

This took the overall affordable quota to 20% of the scheme – half Lambeth council’s 40% target.

But the scheme is extremely contentious so opposition did not fade even though it was passed by Lambeth.

Concern from Westminster Council and English Heritage that the height of the new buildings could jeopardise London’s status as a world heritage site, combined with local residents’ arguments that their neighbourhood – known to most people as a cultural playground where in the shadow of the London Eye, the National Theatre and the Royal Festival Hall among other venues are based – would be irrevocably harmed by the development’s density.

Eric Pickles, the community secretary, judged the Shell Centre scheme to be of national importance. So last September, he “called it in”. A planning inspector was appointed to oversee a public inquiry to determine whether the Shell Centre development should proceed.

Confidential Documents

During the inquiry held last December, two documents, previously not available publicly, came to light. The first was a review by Lambeth’s consultants of Braeburn’s financial viability appraisal into the Shell Centre.

Lambeth’s review was undertaken by BNP Paribas Real Estate. The review reports that in September 2012, Knight Frank and Savills on behalf of Braeburn Estates estimated to Lambeth council that up to 800 flats for market sale would fetch an average of £1,275 per sq ft.

Based on related documents, the Bureau estimates this would produce sales revenue of £959.5 million.

In May 2013, BNP Paribas Real Estate reviewed Braeburn’s figures. Its review suggested the developer’s estimates of sales income from flats should be higher and that marketing, land values and residential agents’ fees should be lower.

Based on this assessment BNP Paribas Real Estate increased the average per sq ft value in the scheme to £1,330 per sq ft. This would generate an extra £41.4m to the project’s current value for the purposes of assessing viability. Despite this increase in value, BNP Paribas Real Estate said that under the viability rules, the scheme could not afford any more affordable homes than the 20% agreed.

There is no suggestion that Braeburn Estates or anyone on their behalf deliberately underestimated or overstated revenues and costs. The company told the Bureau that in its opinion, the alterations made to its projections by BNP Paribas Real Estate “was simply a reflection of the fact that this was a question of judgment upon which experts could reasonably disagree”.

But a second, separate document written in February 2013 for Braeburn Estates, aimed at potential investors, contained valuations of the development based on comparisons with 20 other luxury central London residential projects.

The marketing powerpoint was authored by Knight Frank and Savills, the same consultants who wrote the viability report.

In the powerpoint to potential investors, the property consultants suggested the luxury flats could sell at an average £1,641 per sq ft. If this £1,641 sales level was achieved, it would generate revenue of £1.23 billion for the developers. The Bureau estimates this would yield a profit on the residential component of the scheme of at least £250m.

Based on the values in this sales presentation Braeburn could potentially make £234m more in revenues than shown in the valuation it submitted to Lambeth Council just four months earlier.

Braeburn, its advisers and Lambeth’s consultants, BNP Paribas Real Estate strongly argue that the two reports cited in the public inquiry are not comparable.

They say that the £1,330 sq ft figure agreed with Lambeth in its financial viability assessment was based on recent transactions whereas the slide presentation attributing a £1,641 per sq ft valuation to potential investors indicated expectations of future growth.

BNP Paribas Real Estate senior director, Dr Anthony Lee, who advised Lambeth, said: “At the time we completed our review, available transactional evidence demonstrated that the values adopted were correct.”

However, Lee acknowledged that the financial viability process “is not a perfect system as an appraisal represents a snapshot in time, and markets are dynamic and can change very quickly”.

To reflect this, Lambeth and Braeburn have agreed an arrangement which means that if the selling price of homes reach an average £2,117 per square foot at the Shell Centre, additional affordable homes will be built.

The Bureau has calculated if residential sales reached that level, Braeburn could conservatively make a profit of £600m before it builds affordable homes above the 20% figure it has agreed to deliver.

The Bureau asked Braeburn whether our profit estimate is accurate but it has declined to comment.

The company did, however, say that the Shell Centre scheme requires an investment in excess of £1bn. It argues that its scheme is far riskier than putting money into, for instance, corporate bonds.

Braeburn argues that Lambeth’s own consultants judge that 20% of the scheme for affordable homes is the maximum the scheme can generate under the viability system. It also says that if the entire residential element of the scheme sells for an average of £2,117, it will pay an additional £24m which will ensure the project complies with Lambeth’s 40% affordable housing target.

In a statement, the company said: “Braeburn Estates takes its commitment to the communities in which it operates very seriously. Affordable housing sits at the heart of this commitment. In the case of the Shell Centre, the scheme will deliver up to 40% affordable housing units, with a minimum of 20% being provided even if the development proves to be loss-making. We have in this exceeded the requirements put on us by Lambeth Council and national planning policy.

“Naturally, with any scheme on this scale comes a substantial element of financial risk. In excess of £1 billion of investment is required to deliver this project, which on completion will bring massive benefits to Lambeth and London as a whole – but to our backers is an investment fraught with risk. Given the 10-year delivery pipeline, the potential for substantial delays and additional costs, and the potential for values to fall as well as rise, the rate of return that these investors may achieve is at acceptable market levels compared to other investment opportunities.”

BNP Paribas Real Estate, Lambeth’s viability adviser, added: “When advising our local planning authority clients, (we) always undertake a rigorous analysis of all appraisal inputs presented by applicants in the context of market norms and evidence available at the time of the assessment.

“With regards to sales values, we are required by our professional body (the Royal Institution of Chartered Surveyors) and also by national planning guidance to rely upon transacted sales, rather than market speculation or rumour. Furthermore, sales values should reflect achieved values across a development as a whole and not ‘cherry-pick’ the most valuable units, which would falsely inflate the value of a scheme as a whole. In any event, markets move quickly over short periods of time, and key appraisal inputs may change between the issue of planning permission and the sale of units in completed developments. BNP Paribas Real Estate is working closely with all its local planning authority clients (most notably Lambeth) to address this issue through the inclusion of post-implementation review mechanisms in Section 106 agreements to secure additional affordable housing if viability improves after grant of planning permission.”

In June, the Shell Centre was given the green light after the planning inspector approved the proposal. His report commended Braeburn Estate for its generous affordable housing offer.

This week the Shell Centre scheme could be stopped in its tracks by a High Court judge. Among the grounds for a judicial review is the seeming refusal by Braeburn and Lambeth, the local authority, to disclose its full viability assessment.

No Upside

The disparity in resources between most councils and developers is vast. On the one side, there are over-worked, under-paid planning officers. On the other are armies of planning consultants, public affairs advisers, public relations executives and community engagement consultants.

The schemes probed by the Bureau in this investigation were rare in one respect. They benefited from the advice of an external consultant representing a local authority.

BNP Paribas Real Estate scrutinised the figures submitted by developers in viability assessments. And even though there are questions to be asked about some of the judgements, it is clear BNP Paribas Real Estate did force revisions of developers’ financial assumptions.

But the Bureau has found most local authorities in Britain’s biggest cities frequently do not hire external advisers to scrutinise viability assessments.

Only Bristol regularly commissions independent experts. The rest including Manchester, Cardiff and Birmingham mostly rely on their in-house staff.

Dr Richard Fordham, a highly regarded financial viability housing expert says that consultants working for a developer will often make valuation assumptions which may favour their client and "many local authorities do not have the skills or resources to get to the bottom of development appraisals and how they can be manipulated.”

Another respected viability expert, Chris Marsh added. “This is not through lack of intent. Far from it; but it’s time consuming and requires specialist training and experience.

"There’s no question if you deflate value and inflate cost while adopting a typical profit margin, the effect will be, potentially, to reduce the amount of affordable housing delivered, especially if land value is fixed. That’s undoubtedly true and I have seen it very many times. If local authorities were sufficiently well equipped you could safely say the overall amount of affordable housing would be greater.”

When last year the Bureau investigated 82 of the UK's biggest housing developments in 10 major cities, just 40% met local affordable housing targets.

In Birmingham, not one of the nine biggest schemes met the city's 35% affordable housing target. In one planned 353-unit project, even the allocation of 12 affordable homes – just 3.4% of the scheme – was considered "unviable" by planning advisers representing the developer.

To Kris Hopkins, the planning policy minister, viability guidance is not the reason for falling numbers of affordable homes. It is a question of how councils administer it.

A spokesman for the minster said: “It is for local authorities to agree an appropriate level of contribution to affordable housing with developers. Our guidance is clear that changes in costs and property value should be considered in longer term developments, and councils should use appropriate methods and expertise, whether in-house or external, to determine these.”

Land Grab

For over 40 years, London’s South Bank has been the stage for some of Britain’s biggest planning battles. It was here that in the early Eighties community groups beat off an attempt by developers to build one of Europe’s biggest office developments in what was called the Battle of Coin Street. Victory was sweet. The disputed 13 acre site close to the Shell Centre became home to a housing co-operative.

That fight was led by the Waterloo Community Development Group. Today this small organisation of community activists still has a big reputation. It is led by Michael Ball, a campaign veteran. Ball is still fighting developers who have, he says, made “a land grab of historic proportions”.

“This area has traditionally employed huge numbers of ordinary people, and in recent decades was reclaimed and improved by massive waves of public investment, with support from the local community.

“Now this community is being marginalised and dwarfed by the largest collection of towers to hit London, which will change London like Canary Wharf did, but for little public benefit.”

Jack Hopkins, Lambeth’s cabinet member for growth & jobs, is the councillor in charge of regeneration across the borough. Hopkins blames the affordable housing crisis squarely on the 60% affordable housing grant cut, "botched" housing reforms and the viability system which “mitigates against affordable housing in redevelopment schemes”.

To Michael Ball this means “the 16,000 homes created (in the VNEB) will likely be almost entirely private, and vertically gated. Worse, it may well be a ghost town, largely empty, with flats purchased for investment not occupation, at best as a second or third home.”

What is happening in the VNEB is a story that is replicated across London, the south-east and much of England: the death of affordable housing by thousands of cuts.

Today, housebuilder profits are going through the roof. Bulging profits for the development industry sit uneasily amid a deepening national housing crisis where what is needed above all else are decent, genuinely affordable homes. You have to wonder whether this is a truly viable state of affairs in 21st century Britain.

Podcast: To learn more about the decline of affordable housing in Britain, please visit our Soundcloud page and download a podcast hosted by broadcaster Owen Bennett-Jones. It features Bureau reporter Nick Mathiason, who wrote this article, a senior housebuilder and a London councillor.

The Bureau of Investigative Journalism conducts public interest investigations into a range of subjects from drone attacks in Pakistan to lobbying in the UK parliament. Our stories are published with established international media outlets including The New York Times, The Guardian, The BBC, The Financial Times, Al Jazeera and many more. If you would like to see some of our other investigations or support our work please visit www.thebureauinvestigates.com

Additional reporting by Will Fitzgibbon and Natasha Tsangarides.

Production and photography by Tom Warren.

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