Press Release
Mayor frees up land for second stage of London's housing revolution
3-11-2009 551
More than 30,000 new homes could be created in the capital by freeing up under-used land owned by the Greater London Authority (GLA). The announcement was made by the Mayor of London, Boris Johnson today (November 3rd) as he challenged London’s developers and investors to help rethink the future delivery of affordable housing.
Speaking at his Housing Investment Summit the Mayor called on the key players present to match his commitment and put forward innovative and cost-effective measures to maximise delivery on any potential developments on GLA land. He wants London to show the rest of the UK that it is possible to secure the building of new homes in the face of reduced public spending. He has asked for an audit of land owned across the GLA family, including Transport for London, the London Development Agency and the London Fire and Emergency Planning Authority, to identify potential development sites.
The Mayor is currently spending over a £1bn a year to maintain the construction of new homes in London through the Homes and Communities Agency (HCA) and has pioneered the KickStart programme spending £144m to unlock major regeneration schemes including the Aylesbury Estate, Kings Cross and Woodbury Down. In March he launched the FirstSteps product which helps first time buyers to get on the housing ladder and remains on track to deliver 50,000 affordable homes. Today's summit is focused on the delivery of affordable homes after the current round of funding ends in 2011.
The scheme proposed today would see the GLA act as a shareholder in any new development with future profits re-invested into affordable housing in the capital. The Mayor hopes the offer will inject confidence into the sector, help to get new housing schemes off the ground and attract institutional and other investors to housing developments in the capital.
The Mayor of London, Boris Johnson, said:
“ We're already on track to deliver 50,000 affordable homes which will benefit thousands of Londoners but this success cannot be an excuse to take our foot off the pedal. We have to set our sights to the future and start working now to deliver the next 50,000 and the 50,000 after that.
“The GLA is sitting on hundreds of potential housing sites that could be used to build more than 32,000 new homes and I know we’re not alone. London’s councils, private institutions and HCA can all do the same but the cost and red tape involved is suffocating.
“I want to change this. To do this we need innovative ideas that will reshape how we invest, build and deliver affordable homes in London and in return I’ll put my land where my mouth is and show London is leading the way on delivering affordable homes for 2011 and beyond.”
Sir Bob Kerslake, chief executive of the HCA said:
“Today’s focus on pragmatism, flexibility and innovation echoes the approach of the HCA and its London Board to sustain development in London.
“To benefit from the opportunities that the shift in market conditions has created, it is important that new arrangements use investment over a longer term and deliver wider benefits for communities. Through the Housing Finance Group and the Public Land Initiative the HCA has highlighted its commitment to using public and private investment to overcome current challenges and create future, affordable opportunities.
“I am glad that the HCA was able to support today’s event and continue the debate over which models will deliver the homes we need.”
Stuart Fraser, Chairman of the City of London Corporation’s Policy & Resources Committee said:
"The financial crisis has severely impacted the funding models used to deliver housing projects particularly in London, but affordable housing remains a crucial issue for our city. I hope this summit will provide a chance for both the public and private sectors to come together to consider innovative solutions for the financing of new homes and housing regeneration here in the capital.
"Despite the economic downturn, London is still a world leading international financial centre. I hope that the talent and experience of those who work in the financial and professional services industry coupled with the expertise and knowledge of those in the public sector, will enable us to find the right answers to the complex issue of housing finance."
The Mayor also announced that proposals were being explored at the London Development Agency (LDA) to set up a London-wide housing company. The new company would aim to reduce the cost for boroughs and other public land-holders to bring land forward for development.
The Mayor will be inviting proposals from institutional investors to use GLA land for housing. A new steering group with representatives from all the GLA’s functional bodies is being set up to go through any submissions. Headed by Richard Blakeway, the Mayor’s Housing Advisor, first results are expected early in the New Year.
The capital's developers and housing investors are facing numerous problems in moving forward with London's housing supply. These include difficulties in raising finances to build, falling house prices and land values making many housing schemes no longer viable, and expected funding cuts from central Government. The Mayor has recognised that there is a pressing need to look for ways to use the limited public sector investment more effectively and for more imaginative means of bringing in private financial resources to invest in new homes in the capital.
The Mayor will be using the results of today’s meeting to prepare a submission, ready for any new Government, setting out what is needed to assist him to maintain the delivery of London’s housing pipeline in the face of limited public sector resources in the next spending round.
Ends
Notes to Editors
Notes for editors:
1. The Mayor is responsible for drafting a statutory housing strategy for London and for directing the use of London’s housing resources and making recommendations to central government on investment issues in London.
2. Held in partnership with City of London Corporation and the Homes and Communities Agency the Summit was an opportunity for leading figures in. London’s housing industry - senior representatives from national government, local government, governmental agencies, private and public sector developers, housing consultants and commentators, leading law firms and banks and other financial institutions - to discuss how to maintain the delivery of affordable homes in the face of turbulent housing market conditions and an anticipated reduction in public subsidy.
3. In May 2009 the Mayor pledged to halve severe overcrowding in London’s social housing sector by 2016, the first city in the UK to make this commitment, together with proposals to deliver more family-sized affordable housing.
4. The Mayor’s First Steps Housing programme is aimed at improving the intermediate housing offer for Londoners. The programme will bring forward new products including the Up2U scheme launched earlier this year. It is also looking at ways to simplify the applications process and make the system easier for first time buyers to understand. The Mayor is consulting on increasing the threshold from £60,000 to £74,000 for households with dependents in London, reflecting the higher cost of family housing in the capital.
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