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Khan calls on government to increase cash for housing

Words: Laura Edgar
Sadiq Khan / Steve Punter

London needs to deliver 66,000 new homes a year to meet growing demand, according to the Mayor of London, Sadiq Khan.

To meet this need, Khan has called on the government to commit to “profoundly” increase the funding and powers available to London at the Budget, which will take place on 22 November.

As a first step, he wants government funding for affordable homes in the capital to return to the level it was in 2009/10.

City Hall said it used its Strategic Housing Market Assessment to calculate the figures.

It also suggested that 65 per cent of these new homes would need to be affordable if they are to meet the needs of Londoners.

Khan said his draft London Plan, which is due to be published next month, will include “strong new measures and set ambitious targets for every London borough to move towards this goal”. This is roughly double the current rate of homebuilding.

To achieve this level of building, the mayor said more powers should be devolved to the capital, including those over public land and allowing councils to borrow to invest in homes, as well an increase in funding for housebuilding and infrastructure.

City Hall said its modelling suggests the government should increase funding for affordable housing alone in London to around £2.7 billion a year, more than five times the current spending levels.

As well as increasing the affordable housing funding, Khan wants the government to make a long-term commitment to increase funding to the levels required to meet London’s need.

Khan said: “The housing crisis is a major factor in the high cost of living in the capital, as well as putting home ownership out of the reach of many young Londoners who fear they will never get a foot on the property ladder. In the worst cases it can affect social cohesion, cause poor health, and plunge residents into poverty.

“I cannot overestimate how terrible a situation we inherited. Successive prime ministers have failed to invest anywhere near enough in building new affordable homes. The previous mayor stopped investing in homes for social rent altogether and cut the number of new affordable homes he funded to the lowest level since records began.

“This government keeps saying they understand the scale of London's housing crisis, but these statistics prove they are just tinkering around the edges. It's time for the prime minister to match her words with action and use the Budget to commit to the profound increase in investment and powers London needs to tackle this crisis once and for all.”

Kath Scanlon, London School of Economics, said: “The UK as a whole doesn't have a housing crisis – London and the South East do. The crisis stems from strong demand and weak supply, and the mayor's new figures emphasise the scale of the shortfall. London's elected authorities could do much more to address the housing issue if they had the tools that major cities in other countries take for granted – particularly around taxation.”

Kieron Hodgson, director of central London planning at Iceni Projects, said: "The key question is 'how do you unlock growth in the suburbs?’

"The mayor needs to ensure that he is not using the cheaper land prices in more peripheral locations as an excuse for ignoring the problems in central London where the housing crisis is most acute. Similarly, it is not helpful to focus on one type of residential product i.e. family homes. We need to build more of every single type and tenure of home - in every part of the city."

Image credit | Steve Punter