Sadiq Khan hitting affordable homes targets but more government help is required, London Assembly hears

Sadiq Khan hitting affordable homes targets but more government help is required, London Assembly hears

The 2018/19 financial year saw construction of the highest number of affordable homes get underway in London since 2010, according to figures compiled in the London Assembly housing committee’s latest affordable housing monitor.

The 14,544 total beats Sadiq Khan’s 2018/19 overall target of 14,000, agreed with national government. It includes just under 4,000 homes at social rent and 1,916 council homes – more than in any year since 1984/5.

Quizzed by the committee about the figures yesterday, deputy mayor for housing James Murray highlighted Mayor Khan’s social rent programme, including plans for 11,000 council homes, currently being taken forward by 27 of the 32 London boroughs.

“When we came into office all the money available from government was for some kind of home ownership,” he said. “We thought that was not the right balance. We lobbied hard and won funding for social rent in March last year – the first time national government has given money for social rent homes in 10 years. We have been able to bring back social rent, which was effectively extinct under the previous Mayor.”

Government funding rules were nevertheless still “heavily weighted” towards intermediate housing – shared ownership or rentals below market rates but higher than social rent levels, he said.  

The report shows six out of 10 affordable homes started in 2018/19 were “intermediate”, with just 27 per cent social rent and the remainder at Khan’s London Affordable Rent levels, which are roughly equivalent at between 40 per cent and 60 per cent of market rent.

And the Assembly report revealed both an overall shortfall in the total number of homes built – 32,000 in 2017/18 against the 66,000 a year requirement needed according to City Hall – and a continuing social rent shortfall.

Khan’s £4.82 billion settlement has so far seen 41,704 homes started towards his target of 116,000 affordable homes by 2022, but City Hall estimates suggest a need for 31,000 social rent homes a year.

“The overwhelming need in London is for social rent housing,” said Murray. “We keep telling the government that we need more money for social rent homes, but it has been a struggle to get funding. And there’s no way we can magic these homes out of nowhere without more money.”

Devolution, including the power to raise and spend money, was key, he added, with discussion with government ongoing. “I hope the new Prime Minister will listen. After all, Boris [Johnson] was a huge advocate of devolution when he was Mayor,” Murray said.

Murray also warned that affordable housing plans ate not exempt from the threat of Brexit. “There isn’t a person in the housing industry who doesn’t say Brexit is their number one concern,” he said. Housing associations were building the bulk of affordable housing, but relied on cross-subsidy from private sales to deliver their programmes, and were increasingly nervous about the state of the market:

“If we reach a no-deal cliff edge, everything escalates very dramatically. We will need government to step in because whatever money we have will not be enough. Fixing London’s housing crisis, even with fair winds, requires massively more building of affordable housing, social housing, council housing. In the case of a downturn that becomes even more the case, to keep things going.”

City Hall has already pledged £200 million emergency cash to support housing associations switching, for example, from building homes for sale to more homes to rent. And in February the Mayor joined with London Councils and the G15 group, the largest housing associations in London, in warning of “growing risks to the delivery of new affordable housing”.

A joint letter to secretary of state James Brokenshire also warned of labour shortages – more than half the London construction workforce is non-UK – and called for extra investment of up to £5 billion to safeguard delivery of 40,000 affordable homes in the capital. No commitment from the government is so far forthcoming.

See the On London guide to London affordable homes here.

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