Mayor Boris Johnson has proposed using up to £200m of public money to build new homes which would be rented at below market rents for a ten year period.
City Hall says the ‘London Housing Bank’ scheme would “speed up” the construction of around 3,000 new homes on developments which already have planing consent.
Under proposals published today for consultation, the homes would be rented out for at least ten years before being sold, at which point the loan would have to be repaid to City Hall.
The Mayor’s office says the scheme could help unlock thousands of homes which have been granted planning permission but aren’t yet scheduled for construction due to “funding and sales constraints.”
Announcing the consultation, Mayor Johnson said: “The proposed London Housing Bank is just one of several highly innovate new schemes we are pioneering here at City Hall to help meet the needs of hard working Londoners.
“Through this exciting new fund we hope to provide thousands of brand new homes many years sooner than would otherwise be possible, and make them available to rent at more affordable, below market, rates for hardworking Londoners.”
The Green group on the London Assembly say the Mayor should use the proposed funding to ensure tenants have “long term secure tenancies and predictable rent rises, pegged to the rate of inflation.”
Darren Johnson AM said: “Boris Johnson is already proposing secure tenancies and predictable rent rises as part of his deal with big institutional investors and it would make sense to extend this approach as far across the private rented sector as possible.
“It is like the German system where big investors have been encouraged into the housing sector because it is stable and guarantees a reasonable return over a long period of time.”
Developers, agencies and other housing stakeholders are invited to respond to the Mayor’s consultation. The closing date for submissions is May 21st.
