Sadiq Khan says he will use the £3.15bn of housing funds allocated to London in last week’s Autumn statement to deliver 90,000 new affordable homes over the next five years.
Although some of the money confirmed by Chancellor Phillip Hammond had previously been earmarked for the capital, City Hall found itself having to persuade the Treasury not to clawback the cash as part of its review of public spending plans.
As well as re-securing the £1.07bn allocated for 2015-18, Mr Khan and his officials emerged from negotiations with a further £2.08bn to be spent by 2021.
The funds will be used to support the building of 90,000 homes across the capital which will be made available to buy and rent at lower than market rents, including through shared ownership schemes and social rents.
In addition, Mr Khan has confirmed that the new affordable homes will include thousands of properties made available at the new ‘London Living Rent’ promised in his election manifesto.
Housing Associations will receive a grant from City Hall allowing them to make homes available at rents capped at “no more than a third” of local average household incomes. This ‘Living Rent’ will allow tenants to save for a deposit, with the Housing Association expected to help them into home ownership within ten years of their tenancy start date.
Tenants would have a legal right to buy their London Living Rent property or could opt to buy a home on the open market. The scheme would be open to households with an income of up to £60,000.
Alongside today’s funding announcement, Mr Khan has published draft Supplementary Planning Guidance (SPG) setting out how local councils should deal with planning applications. The SPG sits alongside the capital’s statutory planning framework, known as the London Plan.
Under Mr Khan’s proposed new guidance, if a developer brings forward plans for schemes where at least 35% of all new homes are deemed affordable, and no public funding is sought, they would no longer have to provide viability assessments.
Councils, which have day to day responsibility for most planning decisions in London, use these documents when deciding whether the proposed number of affordable homes on a site is sufficient.
Under the new SPG, which is subject to consultation, the requirement to provide the assessments would in future only apply to schemes seeking public funding or where fewer than 35% of homes were affordable.
The hope is that developers will voluntarily meet or exceed the 35% target in return for a quicker, simpler consideration of their application.
During the contest to become Labour’s mayoral candidate, Mr Khan promised to amend the London Plan “on day one” of his mayoralty by issuing SPG mandating a minimum of 50% affordable homes on all developments.
However City Hall has today been keen to stress that the SPG “does not and cannot set a fixed target for affordable housing in developments” but instead “provides a framework for delivering the maximum reasonable amount of affordable housing in the context of current London Plan policy and past delivery.”
A fully updated version of the London Plan is expected to be published by 2019.
Speaking on Tuesday, Mr Khan said: “These announcements today demonstrate real progress on the long road towards fixing London’s housing crisis.
“The record-breaking investment I have agreed with government means we can start building a range of different affordable homes to suit Londoners’ needs.
“Together with my new planning guidance, we can begin to boost the number of homes built in London and move towards a long-term strategic goal of half of all new homes being genuinely affordable.”
However Conservatives on the London Assembly claim today’s announcement “represents yet another row back on the Mayor’s pre-election housing promises and does absolutely nothing to explain how he is going to deliver the homes London needs.”
Housing spokesperson, Andrew Boff AM, added: “The Mayor needs to be honest with Londoners and lay out exactly how he intends to tackle the housing crisis.
“Six months in, these empty press statements that promise good news but deliver nothing are simply not good enough.”
Sian Berry, a Green party AM and housing campaigner, has also criticised the Mayor’s announcement.
She claimed the new London Living Rent homes “appear to be only for renters who are on track to own their own home already, much like the Coalition and Tory Governments’ multiple failed schemes like ‘Help to Buy’, ‘Rent to Buy’ and ‘Share to Buy’, which have primarily helped people on higher incomes.”
Berry added: “Renters in London come from all walks of life and those in most need of truly affordable rents don’t earn anywhere near £60,000 a year. We need to make sure people without good credit ratings, who are more than likely to have been driven into debt by the terrible terms of the current rental market, have access to London Living Rent homes too.
“The Mayor needs to tell us what will happen to renters who aren’t able to save for a deposit within the timescale envisaged by his scheme, whose family or employment circumstances change. Will they be forced to lose their tenancies when their time is up?”
Caroline Pidgeon, Liberal Democrat London Assembly Member, commented: “Today’s announcement is quite frankly a damp squib compared to what Sadiq Khan promised Londoners before the election.
“The Mayor’s manifesto was quite clear that he would set an ambitious target of 50 per cent of new homes being genuinely affordable.
“Yet in today’s announcement the Mayor is in reality ensuring a cap of 35 per cent affordability is set on all future developments in London. I fear over the next few years many developments will fall far short of even this figure.
“The difference between what Sadiq Khan promised Londoners and what he intends to deliver is a massive let down to Londoners.”