Recent analysis by Estates Gazette suggested to that knowledgable journal that one part of Sadiq Khan’s strategy for improving the supply of “genuinely affordable” new homes in London – incentivising commercial developers to include a minimum 35% of such dwellings in their housing schemes without the help of public money – is starting to work. Now, the equally essential Inside Housing reports that the mayor’s affordable homes programme, through which Khan allocates funds provided by the government to London housing associations, has got off to good start.
City Hall was pretty chuffed last November when Gavin Barwell, the Conservative (now former) housing minister, allocated £3.15bn of the government’s affordable homes programme fund to the mayor. That is enough to help build 90,000 new places to live for Londoners on low and middle incomes over the ensuing five years. Now, Khan has dished out the first £1.7bn of that sum, enough for 50,000 of the 90,000.
Inside Housing explains that housing associations are pleased, not only because there is more money available than there was under Boris Johnson, but also because the terms on which it is being dispensed are far more agreeable to them. Incredibly, not all the cash Johnson had at his disposal was bid for. Strings attached to it included its being used towards building properties that would, in practice, have been too expensive for people eligible to move into them. Many housing associations walked away. Three years ago, only £400m out of £1.25bn available was taken up.
Under Khan, there is far more co-operation and flexibility in the relationship, allowing a group of housing associations with which City Hall has formed “strategic partnerships” to have extra freedom in deciding when and how they make use of their funding in return for sites they develop including 60% of homes that meet Khan’s “genuinely affordable” definition.
Of the 50,000 now in the pipeline, 18,000 will for what is called London Affordable Rent. These will be more expensive than properties let at traditional social rent rates, but less expensive than the Affordable Rent properties Johnson wanted in London and put housing associations off. The other 32,000 homes will be aimed at middle-income households, either for London Shared Ownership (part buy, part rent) or Khan’s London Living Rent tenure, under which rents are pegged to local income levels and the aim is for occupiers to eventually buy the properties or a share of them.
You can learn much more about the progress of Khan’s affordable homes programme and see a full list of housing associations funded from it by reading the full Inside Housing article here.