The Mayor of London, Boris Johnson, today unveiled the first phase of a huge £100m housing boost for working Londoners, supporting thousands of jobs in the capital’s construction industry.
It will see 27 organisations sharing £78m to build 3,000 new homes across London supporting around 6,000 jobs in construction. The homes will offer flexible ownership options, including low-interest equity loans, ‘rent-to-save’ and ‘part-buy-part-rent.’ A further round of allocations, for the remaining funds, will be confirmed next month.
The £100m fund will benefit around 10,000 Londoners during this mayoral term, with the first homes available in April. It forms part of the Mayor’s Housing Covenant, which sets out how he will stimulate housing supply and make the market work better for low and middle income earning Londoners, easing housing costs and helping people to find more affordable routes to home ownership.
The Mayor of London, Boris Johnson, said: "Boosting construction and improving the housing options of hard-working Londoners is critical to this city’s economic success. There has been a fantastic level of interest in this new fund, which will help an additional 10,000 people make their way onto the property ladder on top of those already being helped through other programmes. There is still much more that must be done to continue to boost house building in London, and I will continue to push for a fairer funding deal which puts us in an even stronger position to meet the challenges that lie ahead."
News of the Mayor’s first funding allocations comes after he recently called upon the Coalition Government to allow London to retain all stamp duty receipts raised on its property sales, estimated to be worth £1.3 billion a year, to ensure it can build the one million homes that London will need by the mid 2030s.
The Mayor’s proposal would give the capital a more stable income stream to create a 25 year plan that will not just solve its housing needs, but create hundreds of thousands of long-term jobs and give a massive boost to its economy, benefiting the whole of the UK. It would also ensure that revenue generated from London’s buoyant housing market was used to address problems caused by unaffordable housing.
Notes to editors
The bidding round for the Mayor’s Housing Covenant opened on 28 September 2012 and closed on 30 November 2012 and was open to any providers capable of delivering affordable home ownership for working Londoners. More information can be found here http://www.london.gov.uk/homesforworkinglondoners
Bids were invited for up to £100m of funding to deliver one of or a combination of the following options:
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- Additional funding for the existing FirstBuy product.
- Other affordable home ownership options which have a track record of success with customers and retail mortgage lenders.
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The new homes will be delivered through FirstBuy and a flexible housing product designed to help working Londoners on moderate and lower incomes purchase properties in ways that best suit them - either ‘rent-to-save’, shared ownership or equity loans.
Rent-to-Save is an option whereby the household pays a discounted rent and follows an associated savings plan to build up sufficient mortgage deposit to access affordable home ownership.
1,701 homes will be funded through the FirstBuy initiative, allowing working Londoners to purchase new build homes with a 5% deposit and a loan from the GLA and developer of the homes.
1,325 homes will be funded through the flexible product which will help working Londoners on moderate or low incomes purchase their own home through a financial product suited to their individual circumstances through either rent-to-save, shared ownership or equity loan.
These initial allocations, which are subject to contract and appropriate due diligence, cover only the flexible product and FirstBuy in 2013-15. Detailed due diligence is currently underway with a number of providers who bid for other affordable home ownership options. It is anticipated that the GLA will be in a position to make announcements on these sometime in March.
In addition to the above, providers have been informed of indicative allocations for FirstBuy in 2015/16. These will be confirmed subject to successful delivery of earlier allocations.
In the funding prospectus the Mayor made a commitment that all of this funding realised by the GLA in the next 10 years will be reinvested into further affordable home ownership for working Londoners. This offers the potential to deliver significant numbers of additional homes.
In total bids were received to the value of £209m from 42 different organisations. These were a mixture of housing associations, housebuilders, London Boroughs and new housing providers.
Affinity Sutton Group Ltd £1,661,450 64
AMICUSHORIZON LTD £1,092,000 42
Asra Housing Association Ltd £800,000 40
BDW Trading Ltd £13,623,405 609
Bellway Homes Limited £1,738,823 80
Berkeley Homes Plc £2,590,000 74
Catalyst Housing Limited £3,727,064 161
Countryside Properties (UK) Ltd £2,611,322 107
Crest Nicholson Operations Limited £728,062 29
East Thames Group £3,685,000 134
Fairview New Homes Ltd £3,576,960 189
Galliford Try Homes £377,485 16
Harrow Council £250,000 10
ISIS WATERSIDE REGENERATION £782,508 27
London and Quadrant Housing Trust £540,000 18
London Borough of Camden £1,220,000 61
London Borough of Ealing £435,000 29
London Borough of Enfield £375,000 15
Network Housing Group Limited £8,252,840 240
Notting Hill Home Ownership £11,319,163 356
Oak Housing Limited £1,710,000 57
OCTAVIA HOUSING £503,250 21
Persimmon Homes £1,016,759 47
Redrow Homes Ltd £6,046,964 257
Solum Regeneration LP £412,650 17
Taylor Wimpey UK Limited £6,029,410 256