In a major impetus to off-site construction technology, which has the potential to address the housing crisis from the long-term, London’s Mayor Sadiq Khan has announced investment of £25 million as part of an innovative deal with a private developer.

The investment will go towards construction of new factory-built affordable one and two-bed homes for first-time buyers in the capital. “The Mayor’s investment in Pocket Living will see work start on at least 1,059 new homes by March 2021, with a third expected to be built off-site in a factory and dropped into place,” the Mayor’s office said in a statement.

The funding from the Mayor – all of which will be paid back in full by the end of the next decade – will help finance ongoing site purchases for development. It will enable Pocket to increase its rate of delivery of high-density flats on small brownfield sites to provide more number of new and genuinely affordable homes for Londoners. It is part of the Mayor’s Innovation Fund, using investment secured as part of Sadiq’s record-breaking £3.15bn deal with government in November last year.

The latest announcement will provide a much-needed boost to the London housing sector where the number of buyers outstrip supply. Several developers, including Strawberry Star, are coming up with innovative plans to deliver homes at lower capital values for first-time buyers using pre-fabricated technology.