Southwark Council has raked in more than £5 million building new homes through the government’s New Homes Bonus grant, figures reveal.
£5,112,761 will be awarded to the council next year for creating 1,355 houses in the borough between October 2020-21.
This is despite the fact that there were nearly 350 extra empty homes across this period.
The New Homes Bonus scheme was set up by David Cameron’s government in 2011 to encourage house-building by local councils. But there is no obligation for the council to use the bonus funding for housing development.
It is based on the amounts of extra council tax revenue raised from new-builds, conversions of long-term empty homes brought back into use, and there is an additional payment for providing affordable homes,” said Cllr Rebecca Lury, cabinet member for finance, performance & democracy.
“Building high-quality housing for our residents has always been a council priority and Southwark has seen major growth in the last decade with thousands of new homes being built – on average around 1,400 new homes per year.
“This has meant residents have benefitted greatly from significant levels of additional money through the New Homes Bonus that we use to provide services across the borough,” she added.
Southwark Council’s building splurge placed it near the top in London last year.
It dwarfed Lewisham’s construction of only 301 new homes, earning the local authority around £1 million.
Only Greenwich surpassed Southwark by building 1,459 homes last year.
Of the 1,355 new properties built by Southwark Council, 556 were defined as affordable housing – equivalent to 41%.
Still, there is no agreed definition of affordable housing.
However, the government says affordable homes should cost no more than 80% of average local rent.
In an area where the average rent was £1,000 a month, this would mean that an “affordable home” costs £800 or less.
Just 16% of Greenwich’s new-builds fell into the category of affordable housing – equivalent to 233 homes out of 1,459.
Southwark Council has been approached for comment.
The government figures for new-home construction in London and the wider UK can be viewed here: https://www.gov.uk/government/publications/new-homes-bonus-final-allocations-2022-to-2023