Sadiq Khan’s housing deputy Tom Copley has praised City Hall’s performance on delivering affordable homes during the pandemic, as figures confirmed 13,318 new ones were started in the capital with mayoral funding last year – more than 3,000 above the target agreed with the government. But he also warned of “choppy waters” ahead for affordable housebuilding programmes if more government funding is not forthcoming.
Copley was facing questions at the London Assembly’s housing committee, as it published its annual affordable housing monitor for 2020/21, focusing on the impact of the Covid-19 pandemic on the Mayor’s multi-billion housing programmes.
While starts on site slumped dramatically at the beginning of the year, a rapid recovery had seen almost 9,000 new homes started in the three months from January to April this year, the committee heard, with shared ownership homes remaining popular.
Targets of between 16,000 and 18,000 homes to be started in 2021/22 and between 25,422 and 27,722 in 2022/23 had now been agreed with Whitehall, Copley said, adding that he was “very confident” they would be met.
Khan’s housing programmes, comprising grants to housing associations and London’s councils, funded by Whitehall, include £4.8 billion earmarked for 116,000 new affordable homes by 2023, and £4 billion for a further 35,000 homes between 2021 and 2026. At April this year, some 72,000 were underway and some 34,500 completed.
Copley highlighted that the Mayor had successfully argued for the majority of the 35,000 homes to be provided by 2026 to be social rent dwellings, the “most affordable and most needed” homes. “The government has come full circle from when it originally wouldn’t allow social rented homes to be created,” Copley said.
New City Hall planning rules encouraging developers to provide more affordable homes had also seen proportions boosted from 26 per cent affordable on large schemes when Khan took office to 41 per cent currently, he added.
Provision of affordable homes overall nevertheless remained well below the 43,000 a year the London Plan estimates are needed, while “Right to Buy” sales of council homes still outstrip new supply, said committee chair Sian Berry: “We are miles off every single year.”
And though remaining optimistic about City Hall’s current programmes, Copley warned of “some very choppy waters ahead”, with rising construction and labour costs and the demands of the “net zero” agenda hiking the bill for building new homes, while building safety requirements are prompting a shift towards spending on existing homes rather than development. “The sector is constrained by the finance that is on offer,” he added. “If the government was to give us more funding, we could deliver more homes.”
Richard Hill, vice-chair of the G15 group of major London housing associations, reported the cost of materials rising by up to 10 per cent along with wage pressures, and Lucy Grove from the National Housing Federation, which represents housing associations in England, said that contract renegotiations were seeing cost increases of up to 25 per cent on schemes already underway.
The G15 has estimated £3.6 billion for safety work on dangerous tower blocks, the equivalent of building 72,000 homes, Hill said, with government funding generally available only to remove cladding on leasehold blocks higher than 18 metres. “The more we spend on building safety, the less we have for new homes,” he said, with Grove adding that housing associations are increasingly prioritising “building safety and net zero”.
Watch the Assembly housing committee meeting in full here.
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