LONDON: The scandal of "affordable" homes was exposed yesterday. Flats and houses which are supposed to be available to key workers such as teachers, nurses and police officers are actually being sold for more than £400,000, according to a London Assembly report.

The sum is more than double what even the best-paid key workers could expect to be able to borrow.

The report accuses Mayor Ken Livingstone of failing to define what "affordable" means. Affordable housing currently has no official definition but is directed at younger key workers.

The report said it had to be defined by a price cap to make sure it would actually reach the people who need it.

Livingstone stipulated that half of new developments should fall into the category.

However, the Assembly says it has identified a series of schemes where the homes are far beyond the reach of key workers. These include:

* Maison Rouge, Fulham, where two-bedroom "affordable" flats were on sale for £403,000.

* Chelsea Bridge Wharf, Wandsworth, where a two-bedroom flat cost £385,000.

* Bermondsey Wall West, which had three-bedroom maisonettes on the market for £395,000.

* Imperial Wharf, Fulham, which had a £425,000 two-bedroom flat for sale.

The report says that developers are able to get round requirements to offer affordable housing because of the way the word is defined.

The loose definition allows housing to be advertised as affordable, while flats are sold at open-market prices.

The report calls for a new, tighter definition of the price as "three-and-a-half times the range of household incomes between £16,400 and £49,000."

That would limit the price of affordable flats to a maximum of £171,000.

The report, by the Assembly’s planning committee, also found that developers are getting round another key planning rule to encourage affordable housing by building tiny flats and not enough family homes.

Because most councils calculate the percentage of their affordable-homes targets on the basis of unit numbers and not square footage, developers are building vast numbers of small flats to "match" the numbers of large apartments.

As a result, the report says, there is a "surplus of about 12,000 one-bedroom properties but a shortfall of more than 28,000 two, three and four-bedroom homes for which there is the greatest need."

Committee chairman Tony Arbour said: "The mayor helped create this problem by stating that the number of affordable units should match the private ones but that their size did not matter.

"It is hardly surprising that developers seize on this to provide the smallest affordable units they can."

The committee wants to outlaw this practice and for boroughs to define affordable housing clearly in their official plans and to require a better mix of sizes to meet local needs.

The report comes as a row escalates over the sale of affordable housing units to speculators.

Threshold Group, a charitable housing association, has sold 86 flats at Chelsea Bridge Wharf that were built for teachers, nurses and police officers to customers who include buy-to-let investors, Hong Kong speculators and City bankers.

Berkeley Homes had planning permission for more than 800 luxury flats on condition that a quarter of them were designated for key workers. But of the 242 affordable flats, 86 went to non-key workers.

Wandsworth council leader Edward Lister said: "We are very angry. First, because Threshold didn’t even bother to tell us what they were doing, but mainly because these flats were meant to help our key workers in the long term - and now 86 of them have gone for good."

Battersea Labour MP Martin Linton said: "I was led to believe all 242 of the flats would be affordable. I want to find out why they were not."

Threshold Group said it had to sell the 86 flats to fund the other 156.

A spokesman said: "We always planned to provide a number of apartments to be sold to subsidise the larger number of traditional shared-ownership homes." – London Evening Standard