London mayor Sadiq Khan has confirmed a new deal under which private house builders will provide 35% of new homes as affordable housing, rather than the 50% pledged in his manifesto.
The threshold was revealed today in a new housing strategy in which Khan announced he would grant £3.15bn allocated to City Hall by the chancellor to housing associations that build a minimum of 50% affordable homes “with some partners enabled to deliver at least 60%”.
It is estimated this will provide funding for at least 90,000 affordable homes over the next six years, an increase of nearly 50% on the previous six years. They will be a mix of low-cost rent, shared ownership and “London living rent”, which is based on a third of average incomes in each borough. Grants rates would be increased to up to £60,000 per unit for new London affordable rates.
The mayor will use the cash to fund 58,500 shared ownership and London Living Rent homes, and 29,000 at new “London Affordable Rents”.
Khan released the first details of his £3.15bn grant programme today (Thursday), following months of negotiation with central government.
However, the announcement was ridiculed by City Hall Conservatives who accused the Mayor of backtracking on promises made during the election.
Tory chairman of the London Assembly Housing Committee Andrew Boff told BBC London Khan's promises were “evaporating like a mist on Hackney marshes”.
“Even with the watered down figure of 35%, he’s actually said that if you come forward with a good enough excuse I’ll let you build even less,” he said.
However, Khan denied he had done a U-turn and said he planned to “move towards a long-term strategic goal” of half of new homes being genuinely affordable. During Boris Johnson’s tenure as mayor levels of affordable housing were often relaxed with developers using “viability tests” to prove that schemes were not viable if boroughs demanded too high a level of affordable housing.
He said: “I have been clear that fixing the housing crisis will be a marathon and not a sprint, but I am determined to lead from the front and get on with building genuinely affordable homes for Londoners to rent and buy.
“These announcements demonstrate real progress on the long road towards fixing London’s housing crisis.”
The housing association sector appeared to welcome the deal. Writing in Inside Housing, David Montague, chief executive of London & Quadrant and the biggest builder in London, said: "Sadiq Khan has secured the very best deal for London. Now housing associations in partnership with local authorities and house builders must rise to the challenge and put the housing crisis behind us once and for all.”