Sadiq Khan calls for £5bn affordable housing investment | News

Sadiq Khan calls for £5bn affordable housing investment

The Mayor of London is asking for £5bn investment as he looks to revive the capital's housing sector post Covid-19.

London builders, councils, housing associations and unions have come together with the Mayor to demand an emergency £5bn investment package to "keep London building, protect construction jobs in the capital, and increase the supply of new social homes."

Khan is asking ministers to go further than last week's announcement, and commit to a further £4.9bn a year investment to build the council, social and other genuinely affordable housing London needs from 2023 onwards. 

Part of the programme he is wanting is a £3.5bn ‘buyer of last resort’ scheme.

This would allow councils and housing associations to buy unsold private homes at cost price and turn them into social housing if a buyer cannot be found in the open market.

Khan says this would "guarantee the delivery of up to 9,200 homes" between 2020 and 2022.

Councils and housing associations would be involved in the scheme from the start, to ensure eligible homes meet the quality standards expected from a council, social or affordable home.

The other £1.33bn tenure conversions programme would safeguard and accelerate London’s affordable homes programme by converting housing currently planned for low-cost ownership and sale into homes for social and low-cost rent.

This will enable the Mayor, councils and housing association partners to continue to build in these challenging circumstances, as well as delivering more homes for social rent than at any time in at least a decade.

If fully funded, the programme would deliver 34,597 homes at a tenure split of 70% London Affordable Rent (benchmarked at social rent levels), 20% London Living Rent, and 10% London Shared Ownership for the remainder of the current Affordable Homes Programme.

City Hall analysis shows this would require 16,899 conversions from currently agreed tenures.

These schemes would enable councils, housing associations and private developers to maintain housing delivery during the current period of market uncertainty.

Safeguarding construction will also protect jobs ahead of the Government’s furlough scheme being wound down later this year. 

The Mayor of London, Sadiq Khan said: "The Government’s economic statement tomorrow is a chance for the Chancellor to put building new homes at the heart of a plan to kick-start the recovery.

"The whole of London’s government and housing sector stands ready to play a central role in supporting the recovery, not just of the capital but the whole country, if the Chancellor will gives us the resources we need.

“But I want London’s housing sector to do more than just bounce back, I want us to emerge from this crisis with a greater resolve to deliver the council, social and other genuinely affordable homes that London so desperately needs and to protect construction jobs. This investment package would help make that a reality.

“The work of London’s Covid-19 Housing Delivery Taskforce has shown the broad support across business, trades unions and the housing sector for greater Government backing for new genuinely affordable homes.

“Ministers now have a unique opportunity to help address the issues of housing supply and affordability whilst also underpinning London’s economic recovery by supporting tens of thousands of jobs and training opportunities at a time when the housing market is in jeopardy.”

Helen Evans, Chair of the G15 and Chief Executive of Network Homes, said: “Housing associations are poised and ready to support the capital's economic recovery.

“After we emerge from this crisis, the need for social homes for a broad range of people will be immediate; it's become even clearer that our essential workers, former rough sleepers, those who are suffering an economic shock and those in overcrowded housing need a steady supply of affordable, especially social, homes.

“In an uncertain future, we need certainty that funding for social homes will be available for the wide range of people who need it, regardless of the performance of the private market.”

Cllr Darren Rodwell, London Councils’ executive member for housing and planning, said: “We share the prime minister’s ambitions to ‘build build build’ – but this will only be possible through significant investment.

"Emergency funding in affordable housebuilding in the capital would bring a major boost to the economy and help address the homelessness crisis, which is worse in London than anywhere else in the country.

“London boroughs have long called for more powers and resources to address the chronic shortage of affordable housing. In the face of the massive economic challenge posed by the Covid-19 pandemic, this is a crucial opportunity for the government to work with us in protecting construction jobs, increasing housebuilding capacity, and delivering the affordable homes that Londoners need.”