The Mayor of London has announced new planning rules to speed up the building of more affordable housing in the city which has a shortage of homes at the lower end of the market.
Sadiq Khan also announced plans for how the record breaking investment funding of £3.15 billion announced in last week’s autumn statement will be used to support 90,000 new affordable homes over the next five years.
He explained that previous national rules on affordable housing investment were rigid, including no investment at all for mainstream low cost rented housing. Following negotiations with the Government, new rules mean investment in London can now be spent on a mix of homes for low cost rent and affordable home ownership.
He said that it is not a ‘one size fits all’ approach to affordable housing in London as the city needs a balanced mix of homes to rent and buy. The 90,000 affordable homes will be a mix of low cost rent, shared ownership and London Living Rent, which is based on a third of average household incomes in each borough.
Most homes in the Mayor’s programme will be delivered by housing associations, with the condition that their plans must include a minimum 50% affordable housing with some partners enabled to deliver at least 60%.
And the new Supplementary Planning Guidance (SPG) sets out for the first time an innovative approach both to speeding up decisions in the planning system and increasing the levels of affordable housing.
Khan said that the SPG, which has been developed from extensive discussions with councils and the housing industry in London, is the first step to raising affordable housing levels from the current low level of 13%.
It aims to set out a clear, consistent, and transparent approach to ‘viability’, the process through which a development’s affordable housing contribution is assessed and offer developers a new quicker route through the planning process, removing the requirement for protracted viability negotiations if they meet a minimum 35% affordable housing.
It will also support new Build to Rent developments where institutions like pension funds invest in blocks of long term private and affordable flats to rent. This is well established in other part of Europe and the United States and now a growing sector in the UK.
‘London is in the midst of a housing crisis with thousands of Londoners priced out of a city they call home. I have been clear that fixing the housing crisis will be a marathon and not a sprint, but I am determined to lead from the front and get on with building genuinely affordable homes for Londoners to rent and buy,’ said Khan.
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