Tens of thousands of Londoners are set to benefit from emergency measures to significantly ramp up housebuilding, unlock stalled sites and ensure more affordable homes are being built across the capital.
The Mayor’s record on housing in London, working with London boroughs, includes starting more new council homes than at any time since the 1970s and, prior to the pandemic, completing more new homes in London than any time since the 1930s.
But housebuilding in London has faced significant challenges over recent years due to a combination of the legacy of the previous government, impact of the Covid-19 pandemic, high interest rates, spiralling construction costs, regulatory blockers and wider economic conditions. This has created a perfect storm, resulting in more than a third of boroughs recording zero housebuilding starts in the first quarter of this year.
Accordingly, the Housing Secretary and Mayor of London have agreed to take decisive action to tackle the housebuilding crisis facing the capital and make it easier for people struggling to find a place to call home.
Time-limited, emergency measures, which are subject to consultation, will unlock development by making sites more viable and incentivise developers to get spades in the ground through a fast-tracked planning process for sites with at least 20 per cent affordable housing. Targeted measures will tackle squeezed viability, including the removal of design guidance that constrains density and temporary relief from development levies for schemes able to start promptly and guarantee affordable homes for Londoners.
Today’s package will mean that more homes – including affordable homes and those for social rent – can be built and built faster. This ‘use it or lose it’ route will come with strict conditions to speed up the delivery of new homes, which if not met will require developers to share their profits with local boroughs to deliver more affordable homes.
The Mayor will be handed new powers to fast-track housing. This will include the ability to review and call-in housing schemes of 50 homes or more where boroughs are minded to refuse. City Hall can also become the decision-maker regarding developments of 1,000sqm or more on green belt.
This new, streamlined approach to planning will also allow the Mayor to expedite the call-in process in certain cases without the need for a full hearing process. This will cut up to six months from the planning process. In addition, the Mayor will be given greater freedom to deliver Mayoral Development Orders, which will help unlock more homes by removing the veto from local authorities.
The Government is also confirming an initial £322 million to establish a City Hall Developer Investment Fund to ensure the Mayor can further increase housebuilding. This is on top of the previously announced £39bn for the Social and Affordable Homes Programme (of which the Greater London Authority (GLA) will receive up to £11.7bn) and low-cost loans through the National Housing Bank.
This decisive action will help the government deliver its mission to build 1.5 million and the biggest increase in social and affordable housing in a generation through the Plan for Change.
The measures follow on from action taken by the Building Safety Regulator and MHCLG to speed up decision-making relating to building control applications for high-rise buildings – with a further commitment to clear historic new build applications in England by the end of the year. Changes to processes are already demonstrating progress, with the majority of applications for high-rise homes going through the newly established Innovation Unit currently meeting or exceeding the 12-week average target.
Housing Secretary Steve Reed said: “Getting spades in the ground in London is crucial if we want to see the biggest increase in social and affordable housing and meet our target of delivering 1.5 million homes in our Plan for Change.
“I have worked closely with the Mayor of London to give the capital the shot-in-the-arm it needs to ensure more Londoners have an affordable home of their own.”
The Mayor of London, Sadiq Khan, said: “Affordable housing has always been a top priority for me as Mayor. We have started more new council homes in London than at any time since the 1970s and, prior to the pandemic, completed more new homes in London than any time since the 1930s. But there’s now a perfect storm facing housebuilding in London due to a combination of high interest rates, the rising cost of construction materials, the impact of the pandemic and ongoing consequences of Brexit. All of this means we are now in the midst of the most difficult period for housebuilding since the global financial crash.
“Urgent action is required, which is why I’ve been working with the government on this package of bold measures. I grew up in a council house, so I know the importance of social and affordable homes. I’m not willing to stand by while the supply of affordable housing for Londoners dries up. With these significant new powers and the initial £322 million of funding from the government – plus the short-term emergency action to get more investment flowing into affordable housing – I’m confident that we can kickstart housebuilding and deliver more of the affordable homes Londoners badly need.
“I will always do everything I can to accelerate the delivery of genuinely affordable homes as we continue to build a better, fairer London for everyone.”
