Mayor’s affordable homes programme slowed by economic factors, London Assembly hears

Mayor’s affordable homes programme slowed by economic factors, London Assembly hears

Economic pressures including the escalating cost of house-building in the capital are set to take their toll on City Hall’s government-funded £4 billion 2021-2026 housing programme – meaning the 35,000 new affordable homes target originally agreed with Whitehall will not be met, Sadiq Khan’s housing deputy Tom Copley has confirmed to the London Assembly.

Factors “outside our control”, including an initial government delay in agreeing the programme, had been followed by soaring inflation and borrowing costs hitting housing scheme costings, Copley told today’s meeting of the Assembly housing committee. “The world changed,” he said. “The programme was no longer deliverable.”

The details of the Whitehall funding package are now being revised, with new targets taking into account higher costs per unit set to be announced after government sign-off, Copley added.

There was better news though in the shape of Mayor Khan’s “record-breaking” hitting of his target to start 116,000 new affordable homes under the previous £4.8 billion funding programme, which ran from 2016 to 2023.

The grand total of 116,782 “starts” by March this year included delivering a 23,000-home “golden era of council housing”, fuelled by improved relationships with levelling up secretary Michael Gove, Copley reported. “He wanted to focus on homes for social rent in a way his predecessors did not.”

A total of 25,658 new affordable homes had been started in 2022/23 alone, the most recorded since 2002, Copley added. Across the programme just under 59,000 new homes had been completed at the end of March. The bulk of the remainder, substantially in large, “multi-phased” schemes including estate regeneration projects, would be finished by 2029, and the final 2,700 homes by 2032.

Between 2016 and 2023, 14 per cent of the affordable total were homes bought up by councils or other providers on the open market, including some acquired on estates subject to redevelopment, former council homes bought by local authorities under the mayor’s “Right to Buy Back” scheme and homes “flipped” from sale in private developments to social rent, the meeting heard.

Quizzed about the numbers of family-sized homes included in the total, Copley reported that a quarter of the 116,000 starts were three-bed homes or larger, with a key restraint being the fixed amount of grant per home regardless of size set by Whitehall for the 2016-23 programme.

New arrangements agreed with the government for more flexible grant rates would make providing larger homes easier in the 2021-2026 programme, he said, adding that boroughs were required to set targets for the mix of housing sizes they required in their Local Plans. “But if we want to get more family homes we’ve got to get more funding out of the government,” he said.

City Hall was now funding new housing schemes in every one of the 32 London boroughs, Copley said, answering questions about individual borough performance. He acknowledged delivery would vary, depending on individual borough characteristics, political pressures and developers’ and residents’ “appetite” for new schemes, but he had a message too for town halls.

“I want to see all boroughs fulfilling their housing targets and we will push them very hard,” he said. “We don’t want boroughs to be dragging their feet when the whole of London has a housing crisis.”

Copley also highlighted the outcome of Mayor Khan’s London Plan policies seeking 35 per cent affordable housing on private development and 50 per cent on public land. They had resulted in overall affordable percentages on housing schemes “referable” to City Hall for final decision, generally those for 150 homes or more, rising from 22 per cent in 2016 to 45 per cent last year.

The full housing committee session can be viewed here.

TwitterCharles Wright and On London.

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