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Draft housing strategy for London over next five years goes out for consultation

Some £250 million has been allocated in London for buying land for new, affordable homes as part of the city’s first ever official Housing Strategy for the next five years.

The money made from selling the land to home builders will be recycled to buy further land for new and affordable homes, unlocking opportunities across the capital, according to the draft document which now goes out for consultation over the next three months.

London Mayor Sadiq Khan also revealed plans to bring together London’s private tenants and landlords to develop plans for a new ‘London Model’ of renting and he called on the Government to help London’s increasingly hard pressed renters.

Under the plan some 90,000 new affordable homes will be started by 2021, a better deal for private renters will be sought and there will be an increasing number of genuinely affordable homes built.

The strategy sets out how the Mayor plans to use his current powers and resources to their fullest extent, but he pointed out that for a really significant step change the Government should provide a comprehensive and urgent devolution of funding and powers, that recognises the scale of the challenge London faces on housing.

Alongside earmarking money to secure land for affordable housing, the Mayor will also be recruiting new technical deal making experts for his Homes for Londoners team, to identify and prepare the new sites. The Mayor has also made it clear that he is prepared to use City Hall’s statutory powers, including compulsory purchase, to their fullest extent where necessary to secure land for new and affordable homes.

The new land fund will be used alongside the record £3.15 billion affordable housing budget that Sadiq successfully negotiated from the Government, and City Hall will work with a range of home builders including councils, housing associations and commercial home builders on housing developments.

Alongside the new focus on land, the Mayor also wants a better deal for the increasing numbers of Londoners who live in the private rented sector, with the aim of creating a modern, fit for purpose and high quality housing option for the millions of Londoners who rent.

The strategy document explains that the current legal arrangements for private rental tenancies were introduced almost 30 years ago, at a time when the sector was in decline. Today, private renting is growing rapidly and renters urgently need better rights and more security, in line with many other European and US cities.

It adds that with a standard tenancy length of just six to 12 months, renters face high rents and little guarantee of security or stability, causing disruption for education, childcare and employment and says the system is also letting down many decent landlords as out of date and confusing regulations make it easier for bad landlords to operate without punishment.

To help deliver a better deal for London’s two million private renters, the Mayor will bring together tenants, landlords, and boroughs to develop a new ‘London Model’ focusing on increasing tenancy security to support a more stable, family friendly sector, where the legitimate rights of landlords are protected too. Once developed, the proposal will be submitted to Government for its consideration.

‘It is shameful that a generation of young people are being priced out of the city they grew up in because of the housing crisis. I inherited a development pipeline where just 13% of homes given planning permission were affordable, which is unacceptable. I’ve been honest from the start that turning things round will take time and fixing the housing crisis will be a marathon not a sprint, but my strategy sets out how we can start making a real difference to affordable housing in the city,’ said Khan.

‘From £250 million to kick start my plans to secure more land for new and affordable homes, to a new model and fairer deal for millions of private renters, I want to help all Londoners facing the housing crisis. I will use my powers and resources to their fullest extent, but Government needs to play its part too by giving London the powers and resources we need to see an even greater step change in the number of homes being built,’ he added.

Jonathan Seager, executive director of housing policy at London First, said that making more land available is critical as there needs to be a dramatic increase the number of new homes London is building, doubling the rate to 50,000 homes each year.

‘We’d also urge the Mayor to bring new ideas and new entrants into the market to finally tackle London’s housing crisis, including the build to rent developments that give people a better choice of secure, long term places to live,’ he added.

According to Paul Hackett, chair of the g15, a group of London’s largest housing associations, there is an urgent need for more land. The group will build 42,000 affordable homes in London by 2021 but securing land to build on is single biggest challenge to increasing supply.

‘We build around a quarter of all new homes in London. If we can secure enough land to build on, and rally the support of our partners, we can build many more,’ he pointed out.

The Mayor’s draft housing strategy includes a range of other measures to significantly increase the supply of new homes in London, including increasing funding for self-build, purpose built private rented developments, modular and community led housing projects to speed up delivery of a range of homes.

He wants to see the introduction of clear housing targets for councils, including on small sites, make it quicker and easier to bring small sites to the market, and changing the way that Mayoral Community Infrastructure Levy (MCIL) is levied so that small and medium sized builders can pay less up front.

The strong focus on bringing forward more small sites will help solve the housing crisis by opening up the market to SME house builders, according to the Federation of Master Builders (FMB).

‘If we’re to build the number of new homes Londoners need, we must urgently make much better use of the many existing small sites that are dotted all over London. In doing so, we will the strengthen the capacity of SME house builders to build more new homes and perhaps even attract some new SME firms into the market,’ said Barry Mortimer, director of FMB London.
He pointed out that FMB research has consistently shown that a lack of available and viable land is the main factor stunting the ability of small builders to deliver more homes. Indeed, over half of SME house builders believe that the number of small site opportunities is, if anything, decreasing.

‘We therefore welcome strongly the Strategy’s proposal for a presumption in favour of appropriate residential development on small sites, which goes further than proposed changes to national policy as laid out in the Government’s Housing White Paper. The London Housing Strategy therefore marks a step forward in empowering smaller house builders in London,’ he explained.

‘In order to reach the 50,000 new homes London needs to build each year, this renewed emphasis on small sites is vital. However, all such progress could be undermined if the Mayor fails to protect small sites from onerous levels of developer contributions,’ he added.

‘National planning guidance states that planning obligations should not be sought from developments of 10 units or fewer, but implementation of this policy in London is patchy at best. Unless the Mayor, and London Boroughs, recognise the need to minimise burdens on the very smallest developments, SME builders will continue to struggle to enter the market,’ he concluded.