Mayor calls on Government to give London affordable homes funding

Mayor calls on Government to give London affordable homes funding

The Mayor of London, Sadiq Khan, has called on the Government to put political differences aside and start negotiations for “significantly more investment” to build thousands of genuinely affordable homes in London, with a focus on new council and social housing.

With funding negotiations between City Hall and Government for the new Affordable Homes Programme covering the next five years (2021/22-25/26) to begin soon, Sadiq has seized the initiative by setting out what is needed from ministers to deliver genuinely affordable homes on a scale which matches both London’s needs and ambitions.

In a letter to the Secretary of State for Housing, Robert Jenrick, the Mayor sets out the scale of the housing crisis London faces – which has been worsened by Covid-19 – and reminds the Secretary of State of his impressive home-building record, including starting building more new council homes than in any year since 1983.

As well as record-breaking progress on new homes, the Mayor has rejected the Government’s definition of ‘affordable rent’, which is priced at up to 80 per cent of market rents.

The Mayor also sets out the evidence for what is required to address London’s housing crisis: joint research between the Greater London Authority (GLA) and the G15 group of large London housing associations found that the Government needs to provide £4.9 billion per year over ten years to deliver homes on the scale required. This is seven times more than the Government currently gives the capital.

The Mayor warns the Government that the challenge of coronavirus reinforces the need for a bold funding settlement to protect jobs and kick-start London’s economy.

The full text of the letter is below.


Delivering new homes for London through the next Affordable Homes Programme

The new Affordable Homes Programme is due to start in April 2021 and I am writing to request that we begin negotiations on how London’s housing needs will be recognised in the programme and to discuss how we can work together to deliver more homes.

My top housing priority as Mayor is to build more genuinely affordable homes in London, particularly council homes and homes at social rent levels – this will remain my priority in any future programme.

I am proud of my achievements on housing and the record shows my approach is working. In the last year alone:

  • Over 17,000 affordable homes were started - the highest number since the Greater London Authority began keeping records in 2003, and hitting the target agreed with your department for the third year in a row;
  • More than 3,300 new council homes were started, the most since 1983; and
  • The number of homes at started at social rent levels rose to over 7,000 last year, up from a level of just three a year which I inherited from the previous Mayor.

However, along with London’s housing sector, I am clear that to deliver affordable homes at a scale which matches both London’s need and our collective ambitions will require significantly more investment from the Government. To give you a sense of the scale of the challenge we face, joint research between the GLA and the G15 group of large London housing associations has found we require £4.9 billion per year over ten years to deliver at the scale needed. We stand ready to rise to this challenge if you will provide us with the resources to do so.

We also have clear evidence that in London the overwhelming housing need is for homes at social rent levels. Building council, social rented and other genuinely affordable homes in London is the only way to tackle the scourge of homelessness – around 17 of every 1,000 households in London is homeless and living in temporary accommodation, compared to just 1.5 per 1,000 in the rest of England. The need for low-cost rented homes is set out in detail in London’s Strategic Housing Market Assessment, a document which has been endorsed by the independent panel of inspectors as part of the London Plan process.  It is only right that the next AHP reflects this.

Furthermore, it is clear that demand for affordable and especially low-cost rented housing will grow as we emerge from the current Covid-19 crisis.  The current economic uncertainty underscores the value of Government investment through the Affordable Homes Programme to promote growth, create jobs, safeguard the housing sector during market upheaval and, importantly, address London’s housing need. This is not just my view but an approach that has recently been endorsed across London’s housing sector through the publication of the final report of my Covid-19 Housing Delivery Taskforce.

I welcomed your announcement on 6th July, confirming a one-year extension of the current Affordable Homes Programme to March 2023.  This extension has provided welcome certainty to a number of our housing delivery partners and the wider sector who have faced delays and other practical challenges as a result of Covid-19. However, it is now necessary for us to discuss how a new settlement can supplement this by providing further confidence.

In recognition of the scale of housing need in the capital and the need to provide certainty for our housing delivery partners as they plan for recovery, I will ask my officials to urgently commence discussions with your team to ensure that Londoners are able to access the affordable, high-quality homes that they deserve. I look forward to hearing from you to and welcome opportunities for further discussion.

Yours sincerely, 

Sadiq Khan

Mayor of London