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06/09/2017

Khan plans to buy land for housing with £250m

Words: Laura Edgar
Sadiq Khan / Shutterstock: 419649955

An initial £250 million has been earmarked by Mayor of London Sadiq Khan to buy and prepare land for new and affordable homes in his draft Housing Strategy.

According to the strategy, the money made from selling the land to housebuilders would be recycled to buy further land for housing.

Khan’s plans for housing aim to bring together the capital’s private tenants and landlords to develop plans for a new London Model of renting. It will focus on increasing tenancy security to support “a more stable, family-friendly sector, where the legitimate rights of landlords are protected too”.

A proposal for the London Model will be submitted to the government once ready.

For there to be a “really significant step-change” in delivering housing, the strategy sets out how the government should provide a comprehensive devolution of funding and powers, something a statement from the mayor describes as being urgent.

Khan wants to recruit new technical deal-making experts for his Homes for Londoners team, to identify and prepare the new sites he secures. He said he would use his compulsory purchase powers where necessary to secure the land.

The £250 million would come from a new land fund, to be used alongside the £3.15 billion affordable housing cash the government allocated to London in last year’s Autumn Statement.

City Hall will work with a range of housebuilders, such as councils, housing associations and commercial home builders, on housing developments.

Khan said: “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 the 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. This launch marks the start of a three-month consultation – I want as many Londoners as possible to let me know their views on how we can improve housing in London.”

Other measures in the strategy include:

  • Diversifying the housing sector – Increased funding for self-build, purpose-built private rented developments and community-led projects.
  • Changing the way the Mayoral Community Infrastructure Levy is levied so small and medium-sized builders can pay less up front.
  • Improving the skills, capacity and building methods of the construction industry.

Reaction:

Jonathan Seager, executive director of housing policy at London First, a business membership organisation, said: “We have to dramatically increase the number of new homes London is building, doubling the rate to 50,000 homes each year, so making more land available is absolutely critical. 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.”

Barry Mortimer, director of the Federation of Master Builders London, said: “The London Housing Strategy marks a step forward in empowering smaller housebuilders in London. 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. 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.”

Ian Fletcher, director of real estate policy at the British Property Federation, said: “Ultimately, many of London’s housing problems are a reflection of a lack of supply and, therefore, delivering a range of new homes that meet rising demand is critical. We welcome the mayor’s focus on supporting Build-to-Rent – a growing sector that is delivering new, high quality and professionally managed rental homes, and has the potential to offer a significant contribution to London’s housing targets.

“The ability, however, to deliver new homes on public land will make or break this strategy. It is important that all public bodies across London are behind the mayor in bringing their redundant land into use.”

Murray Smith, managing director of SiteSales Property Group, a residential property sales and development consultancy in London and the South East, said: “The mayor’s plan to deliver land for housing is to be admired and the theory smacks of his and James Murray’s clear thinking – all too rare in housing policy these days. Highly suitable land sitting in the dusty cupboards of some government bodies must be freed up.

“The number of affordable homes needs to rise as increasing delivery costs have made viability assessments very easy to justify reduced affordable numbers.”

Talking about the public land that needs freeing up, he said private developers don’t want it.

“However, the rhetoric around the policy seems to be silent in regard to the word ‘planning’.  Oiling the wheels of the often calamitous planning processes, varying from borough to borough (heaven forbid if the site straddles two boroughs) must be a priority. The Mayor’s plan will provide ’the ingredients’ but the affordable housing cake will only be ready for teatime if the oven functions.”


The consultation on the Draft Housing Strategy can be found on the Greater London Authority website.

It is expected the strategy will be published in 2018.

Image credit | Shutterstock

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