The housing crisis in London is complex and lifting the borrowing cap on councils to allow them to build more homes won’t fix it without other help, according to the Mayor.
Councils in London need more funding and powers if they are to build the significant number of homes that are needed, says Sadiq Khan.
He has announced London’s first ever programme dedicated to council home building with plans worth more than £1 billion which will see more than 11,000 new homes to be let at social rent levels.
The plans form the cornerstone of the Building Council Homes for Londoners’ scheme which was previewed in May and the interest from councils has proven to be beyond what was expected.
As a result the target of 10,000 new homes has been increased to 11,154 new council homes at social rent levels and a further 3,570 other homes, including those for London Living Rent.
The Mayor is also offering councils more support, including an innovative way to help them reinvest their receipts from homes sold under Right to Buy.
The plans will see councils increase their building rates over the next four years to a total estimated at five times greater than over the previous four years.
Khan pointed out that the Prime Minister’s recent announcement that councils would be allowed to borrow more will not fix the housing crisis and said the capital needs an estimated £2.7 billion per year to build all the council, social rented, and other genuinely affordable homes needed in London.
‘London’s housing crisis is hugely complex and has been decades in the making. There is no simple fix but council housing is the most important part of the solution. Londoners need more council homes that they can genuinely afford, and local authorities have a fundamental role to play in getting London building the homes we need for the future,’ said Khan.
‘City Hall is using money we secured from Government to help councils go much further. It is welcome that the Prime Minister has recently listened to calls that I and others have long made for councils to be able to borrow more to build. But let me be clear, lifting the borrowing cap for councils must be just the first step of reform, not the last,’ he explained.
‘We need at least four times the amount of money we currently get from Government for new social and affordable homes, and we need far greater powers to step in and buy land for new council housing,’ he said.
‘The scale of what I have announced shows the ambition is there in London to build a new generation of council homes. Ministers now urgently need to step up and go the distance too,’ he added.
The Mayor of Newham, Rokhsana Fiaz, said that its bid for £107 million of funding from the Mayor will kick start an ambitious housing programme which will see the construction of more than 1,000 quality homes across 40 sites in Newham started by 2022, and available at London Affordable Rent.
