London Mayor, Sadiq Khan, says the city needs more investment in housing

London Mayor, Sadiq Khan, has called on the government to invest £5 billion in London’s property sector. Before Chancellor Rishi Sunak’s economic statement today, the mayor said a £5 billion emergency investment package would sustain London’s construction industry, protect construction jobs in the capital and increase the supply of new homes.

London will be vitally important to UK economic recovery.

Khan said: “The government’s economic declaration is an opportunity for the Chancellor to put new home construction at the heart of a plan to drive recovery.”

“The entire London government and the housing sector are ready to play a central role in supporting the recovery, not just of the capital but of the whole country if the Chancellor provides us with the resources we need.”

“But I want London’s housing sector to do more than bounce back, I want us to get out of this crisis with a greater determination to deliver the council, social housing and other truly affordable housing that London so urgently needs and protect construction jobs. This investment package would help make it a reality.”

What would the £5 billion be for?

The £5 billion could be used to establish two policies: a ‘buyer of last resort’ scheme and a tenure conversion program.

The £3.5 billion “buyer of last resort” scheme would allow housing councils and associations to buy unsold private homes at cost price and convert them into social housing if a buyer cannot be found on the open market. This would finance the delivery of up to 9,200 households between 2020 and 2022. The councils and housing associations would be involved in the scheme from the start, to ensure that eligible households meet the quality standards expected of a council, social home, or affordable.

A £1.33 billion tenure conversion program would safeguard and accelerate London’s affordable housing program by converting currently planned homes for low-cost ownership and sale to low-cost, social rental housing. This would allow the Mayor, councils, and partners of the housing association to continue to build in these challenging circumstances and to deliver more social rental housing than at any time in at least a decade.

If fully funded, the program would deliver 34,597 households with a tenure division of 70% of London Affordable Income (referenced by social income levels), 20% of London Live Income, and 10% of London for the rest of the current Affordable Homes Program.

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