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Last Updated: Sunday, 15 October 2006, 00:34 GMT 01:34 UK
Key worker housing 'mis-sold'
By Simon Cox
Five Live Report

Affordable housing is designed to cater for the needs of "key workers" who may not have high incomes.

However, in many cases the properties are not going to the people they were meant for.

House building site
Developers often have a 25% quota for affordable housing

Flats intended for nurses and teachers are ending up in the hands of well paid professionals such as accountants or bank managers.

A BBC investigation found almost 40% of the flats marked for key workers at one London development went to people who do not meet the government's criteria.

The Housing Corporation receives almost 1bn a year to support shared ownership schemes mainly in south east England.

But according to the government's own evaluation of shared ownership schemes nationally over a third of properties have gone to people who could afford to buy on the open market.

It is a particular problem in the North where over 80% of people in shared ownership could have afforded to buy on the open market anyway.

'Designer wear'

The BBC investigation centres on Chelsea Bridge Wharf, a luxury development overlooking the Thames where a two-bed apartment can cost over half-a-million pounds.

One block has been set aside as shared ownership. Threshold housing association, which runs the scheme, says 112 homes have been provided for key workers.

But a list of these residents included several accountants, a bank manager and a buyer at Harrods.

In the penthouse top floor flats were an orthodontist, a housing association worker and a financial controller for a FTSE 250 company who admitted he was surprised he could buy a flat supposedly for key workers.

Jessica Hardy, 34, a teacher from Battersea who also lives in the block, says she has long suspected that many of the apartments haven't gone to key workers.

"I do bump into people in the lift who are dripping with designer wear and I think I'm sure you're not even a head teacher, they don't look like doctors and teachers to me".

Salaries earned

Threshold, which runs properties in south-west London and Surrey received more than 2m from the Housing Corporation, the government agency which funds affordable housing.

Frankly it would be better to take the cash from the developer to develop affordable housing in more modest areas
Prof Steve Wilcox
York University

The money was used to help subsidise rents for 50 of the original key-worker flats at Chelsea Bridge Wharf.

Threshold Housing says on this particular scheme they did use their own definition of key worker.

They admit some residents did not qualify as key workers but point out that for example some including the Harrods staff would qualify because of the salaries they earned.

Subsidies received

There are now calls for the Housing Corporation to investigate how the money was used.

"I would be interested in the Housing Corporation having a look at the detail of this housing development," says Dr Phyllis Starkey, MP for Milton Keynes SW.

"I would want to know it was satisfied that 2m of public subsidy had been well used in this particular development."

Dr Starkey chairs the communities and local government select committee which earlier this year conducted an inquiry into affordable housing.

The Housing Corporation says it is satisfied the subsidy was properly spent. It says 23 key workers received a subsidy as did a further 27 first time buyers who were earning less than 49,000.

Expensive neighbourhoods

Developers are regularly required to allocate 25% of new homes for affordable housing.

But Professor Steve Wilcox, a housing expert from York University, questions the wisdom of trying to put affordable housing in expensive neighbourhoods.

"There are some very upmarket developments where even on shared ownership you have to have a very high income to get in.

"In terms of targeting resources most effectively, frankly it would be better to take the cash from the developer to develop affordable housing in more modest areas."

The Department for Communities and Local Government says developers could do more to help, pointing out that almost two-thirds of new major developments have no provision for affordable housing.

Simon Cox's report can be heard on BBC Five Live on Sunday 15 October at 1100 and 1930 BST and will also be available on the Five Live Report website.


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