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London Mayor and housing sector call for £5bn affordable homes investment

7 July 2020 | General

Mayor of London Sadiq Khan has called for the government to commit £5bn to London’s housing sector.

Ahead of today’s economic statement from Chancellor Rishi Sunak, the Mayor (pictured) said a £5bn emergency investment package would keep London building, protect construction jobs in the capital, and increase the supply of new social homes.

Khan said: “The government’s economic statement… 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 give 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 £5bn could be used to establish two policies: a ‘buyer of last resort’ scheme and a tenure conversions programme.

The £3.5bn ‘buyer of last resort’ scheme 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. This would fund 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.

A £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 would enable the Mayor, councils and housing association partners to continue to build in these challenging circumstances, as well as deliver 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 estimated that this would require 16,899 conversions from currently agreed tenures.

In April a taskforce was established to deal with the challenges faced by COVID-19, The ‘Covid-19 Housing Delivery Taskforce’, brought together by Deputy Mayor for Housing, Tom Copley.

Khan added: “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.”

This post has originally been featured in Property Wire.