London Mayor Sadiq Khan’s latest announcement outlining new planning rules to increase the pace of building affordable homes is indeed laudable. The initiatives come close on the heels of the UK Chancellor’s major impetus for housing, as announced in the Autumn Statement. Both the announcements are complementary and interdependent, as the target is to build 90,000 new affordable homes in London to provide relief to home buyers and tenants.
As per the new rules, unlike in the past, housing investment can be spent on a combination of low-cost rent and affordable home ownership in the capital city. Consequently, the 90,000 new affordable homes being planned will be a mix of shared ownership, low-cost rent, and London Living Rent.
The new planning guidance – Supplementary Planning Guidance (SPG) – is aimed at raising the level of affordable homes from the existing 13 per cent (approved in 2014-15) by offering developers a quicker route through the planning process. At the same time, developers have to limit the quantum of affordable homes in new developments to 35 per cent. This will naturally increase the contribution of private developers to the affordable housing stock. There is a speculation that the quantum of affordable homes in new developments could be increased to 50 per cent in phases.
These latest announcements make it amply clear that the Mayor is committed to resolving the housing crisis in London. More such measures are required if the demand-supply gap for houses in London has to be reduced from the long-term perspective.
The Mayor’s new funding programme details how he will use the investment - the biggest housing deal ever secured by City Hall - to support new affordable housing in the capital over the next five years