The Mayor of London, Sadiq Khan, has set out new planning rules which aim to speed up the building of more affordable housing, alongside plans for how the £3.15bn investment announced in the Autumn Statement will support 90,000 new affordable homes in the capital.
The Mayor’s new funding programme details how he will use the investment – the biggest housing deal ever secured by City Hall – to support new affordable housing in the capital over the next five years.
It is launched on the same day as new planning guidance, designed to speed up development and boost affordable housing numbers.
The Mayor says previous national rules on affordable housing investment were rigid, including no investment at all for mainstream low-cost rented housing, but that after his negotiations with government, new rules mean investment in London can now be spent on a mix of homes for low-cost rent and affordable homeownership.
The Mayor says that the 90,000 affordable homes that he hopes will be enabled by this will be a mix of low-cost rent, shared ownership and London Living Rent, which is based on a third of average household incomes in each borough.
Most homes in the Mayor’s programme will be delivered by housing associations, with the condition that their plans must include a minimum 50 per cent affordable housing, with some partners enabled to deliver at least 60 per cent.
The Mayor has also launched new planning guidance, setting out his approach both to speeding up decisions in the planning system and increasing the levels of affordable housing.
Sadiq’s Supplementary Planning Guidance (SPG) is a first step to raising affordable housing levels from the low level of 13 per cent given permission that he says he inherited from the previous Mayor. The guidance has been developed since the Mayor took office in May.
The SPG seeks to set out a clear, consistent, and transparent approach to economic viability assessments, while offering developers a new quicker route through the planning process, removing the requirement for protracted viability negotiations if they meet a minimum 35 per cent affordable housing. It also looks to support new ‘Build to Rent’ developments.
The Mayor of London, Sadiq Khan, said: “London is in the midst of a housing crisis, with thousands of Londoners priced out of a city they call home.
“I have been clear that fixing the housing crisis will be a marathon and not a sprint, but I am determined to lead from the front and get on with building genuinely affordable homes for Londoners to rent and buy.
“These announcements today demonstrate real progress on the long road towards fixing London’s housing crisis.
“The record-breaking investment I have agreed with government means we can start building a range of different affordable homes to suit Londoners’ needs. Together with my new planning guidance, we can begin to boost the number of homes built in London and move towards a long-term strategic goal of half of all new homes being genuinely affordable.”
John Dickie, director of policy and strategy at London First, said: “It’s hugely encouraging to see the Mayor’s continued focus on building the homes London’s workers and families so urgently need. Giving greater clarity and guidance to housebuilders is a welcome step as we work towards a dramatic increase in housing and start building the 50,000 new homes London needs each year.”
Ian Fletcher, Director of Policy at the British Property Federation, said: “The GLA has led the field in seeking to have a planning policy on Build-to-Rent and this latest guidance is immensely helpful to the sector and the Boroughs with which it works. When you are trying to do something new in housing inevitably you need to develop understanding, and the Mayor, his Deputy and team have wanted to be at the forefront, working with planners and investors to cast a sensible planning policy.
“What you want as a developer or investor, such as a pension fund, is clarity and understanding that rental homes are different to those for-sale, which this guidance delivers. The sector wants to deliver tens of thousands of quality rental homes for Londoners, and those at discounted market rent, in a tenure blind manner. Recognising the sector and how it works in this guidance is a big help.”
David Montague, Chair of the G15 – representing London’s largest housing associations – said: “The Mayor has secured the very best deal for Londoners. He has listened to housing associations and given us the flexibility we asked for. Now we must get on with the job of building the homes that London needs.”