Home > Mayor bemoans lack of investment in London's housing

Mayor bemoans lack of investment in London's housing

Last month we reported how Mayor of London Sadiq Khan was calling on the government to invest £2.7billion a year in affordable housing in the capital

The Mayor was hoping the Chancellors autumn Budget would release the funds. It wasn't to be. Despite the chancellor appearing to pledge £2billion for affordable housing.

But the Mayor's office claim there is, in fact, no new funding. The Chancellor's £2billion is cash already in the system. Funds reallocated from other housing schemes. Independent experts back the analysis.

The independent Office of Budget Responsibility (OBR) claims the 'new' cash is unspent money. In a report, the OBR said:"The £2 billion of spending announced by the Prime Minister in October has been financed by reducing spending on ‘accelerated construction’ and ‘starter homes’ across the four years from 2017-18 to 2020-21."

The need for cash

Housing plays a huge role in the Mayor's new plan for London. But Sadiq Khan claims the actual investment in London's affordable rented housing has fallen off a cliff since 2012/13.

 In that year London built 1,687 affordable homes. In 2016/17 the figure was zero.

In real terms, the Mayor's office claims current government funding for housing in London is just £0.5billion per year. And whilst his call for a fivefold increase was probably wishful thinking it's fair to say Mr Khan is not at all happy with the money pledged by the government.

What is the Mayor saying?

In a statement, the Mayor said: "This is the most anti-London Budget in a generation, one which exposes the Government’s abject failure to tackle London’s housing crisis.

"They have failed to match their words with action. It turns out a key pledge from the Prime Minister on housing is just smoke and mirrors and not new money.

"The Government’s current spending on affordable housing in London is still less than half of what it reached in 2010 and less than a fifth of what we really need."

City in crisis

Sadiq Khan insists the government have failed to realise the depth of the housing crisis in London. It's a view shared by other members of the city's council. 

Sir Steve Bullock, London Councils’ Executive member for housing, said: "There are more than 50,000 homeless households in temporary accommodation in London and the need for 72,000 new homes a year to meet demand.

"The Chancellor has taken steps to acknowledge the housing crisis in London in the Autumn Budget but he has not gone far enough to empower councils to play their full part in fixing the capital’s broken housing market."

What happens now?

This month sees the launch of the draft version of the new London Plan. The plan is a strategic blueprint for the development of the city. And with the capital's population expected to reach 10.5million by 2041 housing is an important part of the plan. This is why the Mayor is desperate for more government funding for affordable homes.

The plan includes ten-year targets for new homes in the capital. Nearly 650,000 by 2028/29. The Mayor wants a large proportion of those new builds to be affordable homes for both renters and buyers.

He wants more support for build-to-rent developments and subsidies to allow small and medium-sized builders to develop affordable properties. Councils and housing associations too need to supply more new homes.

But all that takes money, and central government support. At the moment that support isn't forthcoming. At least to the level demanded by Sadiq Khan. No doubt the arguments and lobbying will continue.

Are you looking to let London property? List with MakeUrMove to find London tenants fast.

Related Posts

No results found.