The Aylesham Centre is a rundown half-empty shopping centre built in the 1980s. It is a short walk from Peckham Rye station, which is itself only a ten-minute trip to London Bridge, one of the busiest stations in the capital. It is hard to think of a better site for new homes in a city that needs them desperately.
Those in favour of ‘affordable homes’ often say that normal or ‘luxury flats’ do not meet local needs. But this misunderstands how markets work
Yet to the surprise of no one, this week its planning application was rejected by Southwark council. The reasons the council gave are key to understanding why housing does not seem to get built in the capital, despite this government being elected on a pledge to build 1.5 million homes over the course of this parliament.
Southwark council, in theory, is in favour of building. It has an annual target of 2,300 new homes and since 2014 has said the Aylesham Centre is an appropriate place for a 20-story tower. But in practice, only 80 homes were started in the borough in the last year and it recently celebrated its rejection of an 870-home project on the site.Why isn’t Southwark building? First of all, because it insists that all 35 per cent of new homes are ‘affordable’ – in other words sold (or rented out) for less than they are worth. This is a problem at a time when flats have become more expensive to build and sell for less. If the profit from market-rate sales isn’t enough to cover the cost of building the ‘affordable’ homes, then homes aren’t built.
