London Mayor Sadiq Khan has unveiled plans to build 90,000 new homes in the capital over the next six years.
By freeing up planning rules and working with housing associations and developers, the Mayor wants to build “genuinely affordable homes for Londoners to rent or buy.”
This will include a mix of shared ownership, low cost rent and his much-trailed London Living rent homes.
Details are slowly emerging of the London Living Rent idea. The latest plans show it effectively sets rents at no more than a third of the local average household income while tenants save for a deposit to buy a property.
The money for the new homes will come from £3.15bn pledged to London in the Autumn Statement.
There is a condition that 50% of homes built by housing associations must be classed as affordable housing but further guidance out from the Mayor today says some private developers may get a quicker route through the planning process by offering just 35%
Khan said: “London is in the midst of a housing crisis, with thousands of Londoners priced out of a city they call home.
“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 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.”
Responding to the announcement, Robert Sheldon, affordable housing consultant for Knight Frank, predicted a boom for Build to Rent developments as they will be subject to viability assessments to establish the percentage of affordable housing and the levels of discounted rents that will be charged rather than meeting a blanket target.
He said: “This directive will unlock thousands of new rental homes across London, encouraging a new wave of investment into both the private rental sector and affordable housing sectors. The proposed changes in legislation will result in PRS developers now able to compete more evenly with those building for private sale.
“This announcement is undoubtedly a positive for London’s PRS sector and is set to boost the delivery of much needed private and affordable rented accommodation in the capital.”