Mayor confirms new £1.5 billion boost to help accelerate affordable and social housing across capital
- Mayor’s new City Hall Developer Investment Fund (CHDIF) to deliver record-breaking £1.5 billion in low-interest loans to housing associations, enabling them to boost affordable and social housing delivery
- Low-interest loans will be offered at 0.1 per cent for the first time, helping to build thousands of more homes through innovative finance
- The Mayor hailed today’s announcement saying “we’re doing something that hasn’t been done properly in decades – providing low-interest loans to build the affordable homes Londoners desperately need”
- CHDIF was allocated an initial £322 million last October as part of Sadiq’s ongoing partnership working with Government to ramp up housebuilding in London and unblock stalled sites
- Refreshed action from Sadiq to increase housebuilding in London is on top of record investment of up to £11.7bn through the Mayor’s Social and Affordable Homes Programme over the next decade
The Mayor of London, Sadiq Khan, has announced today that his new City Hall Developer Investment Fund (CHDIF) is making £1.5 billion available in very low-cost interest loans for housing associations, helping to accelerate the construction of new, affordable and social housing across the capital. [1]
However, housebuilding continues to be impacted by a perfect storm due to the disastrous legacy of the previous government, high interest rates, the rising cost of construction materials, the impact of the pandemic and Brexit and Building Safety Regulator delays.
Secured from central government, City Hall will deliver low-interest loans at 0.1 per cent for the first time – which are well below current market levels – for housing finance. The loans will provide additional support to help build more homes through innovative finance, helping to unlock challenging sites across London and supporting Sadiq’s action to deliver more homes for thousands of Londoners. [2]
The Mayor is continuing to work closely with the Government to boost delivery and is committed to building on the progress which has already made to tackle London’s housing crisis, with more new council homes started under Sadiq in London than at any time since the 1970s and, prior to the pandemic, more new homes of all tenures completed in London than at any point since the 1930s. [3]
On average, Sadiq is delivering over 10,000 more new homes in the capital each year than the previous Mayor and since 2018, more than 25,000 council homes have been built – or are being built – with the help of City Hall funding. And last year, the number of council homes completed by London boroughs through GLA-funded programmes was at its highest level since 2016-17.
The CHDIF was allocated millions in grant funding in October last year as part of new emergency measures the Mayor announced with Housing Secretary Steve Reed to ramp up housebuilding. [4] London became the first major UK city to receive an initial allocation of £322 million from the Government’s National Housing Delivery Fund (NHDF), helping to boost large-scale housing projects in our city.
Today, Sadiq has confirmed an additional £1.5bn will be made available through the City Hall Developer Investment Fund over the next year – which is 60 per cent of the £2.5bn national allocation. It brings the fund’s total investment to £1.82bn, close to City Hall’s £2bn ambition.
Establishing the City Hall Developer Investment Fund was the Mayor’s 2021 manifesto commitment, which was endorsed by the 2022 Kerslake Review – an independent report commissioned to increase the speed and scope of housing delivery on land owned by the Greater London Authority (GLA).
This fresh investment to boost the delivery of much-needed new homes is on top of up to £11.7bn funding through the Mayor’s Social and Affordable Homes Programme over the next decade, which will also be supported by these low-cost loans [5]. It is the biggest and longest investment the capital has ever received and the Mayor continues to urge housing providers to bid for funding to help deliver social and affordable housing in every London borough.
The Mayor of London, Sadiq Khan, said: “This £1.5 billion investment from our new City Hall Developer Investment Fund will help us kickstart the delivery of more affordable homes.
“We’re doing something that hasn’t been done in decades – providing low-interest loans to build the affordable homes Londoners desperately need.
“There are so many good, affordable housing projects in our city that need some extra support to get going. These low-interest loans will help make these homes a reality.
“I will continue to work closely with Government, councils and other partners and do everything I can to accelerate the delivery of genuinely affordable homes as we continue to build a better, fairer London for everyone.”
Housing and Planning Minister Matthew Pennycook said: “Through our new 10-year £39 billion Social and Affordable Homes Programme, support for the City Hall Developer Investment Fund, £1.5 billion in funding for low-interest loans, and investment in planning capacity and capability, we’re giving London the tools it needs to address the severe housing delivery challenges it is facing.
“Working in close partnership with the Mayor, we are committed to delivering record numbers of social and affordable homes in the years ahead so that more Londoners can enjoy a decent, safe, secure and affordable home of their own.”
Kate Henderson, Chief Executive of the National Housing Federation, said: “We strongly welcome these low-cost, long-term loans being made available to help turn the tide on the housing crisis in London.
“Housing associations are eager to build much-needed, truly affordable social homes across the capital and these loans will help unlock their capacity to do so at scale and pace.”
Rachael Williamson, director of policy, communications and external affairs at the Chartered Institute of Housing (CIH), said: “This additional investment in the City Hall Development Investment Fund is a welcome boost for affordable and social housing delivery in London. Long-term, low-cost finance will help housing associations unlock complex sites and maintain momentum in building the homes Londoners urgently need. Partnership approaches like this are vital to supporting delivery at scale in challenging market conditions.”
Ian McDermott, Peabody CEO and Chair of G15, said: “Tackling London’s housing crisis is a shared mission for government, the Mayor and housing associations, and this announcement reflects the strength of the partnership. This low-cost, long-term funding will have a positive impact alongside the ten-year Social and Affordable Homes Programme and support and accelerate delivery in the years ahead. At Peabody and across the G15, we’ll continue to do all we can with the Mayor and the boroughs to help reduce homelessness and overcrowding and meet urgent housing need across the capital.”
Notes to editors
[1] In October 2025, it was announced that London would receive around £322 million in grant funding from the National Housing Delivery Fund (NHDF) to establish a City Hall Developer Investment Fund.
The fund is a new government programme (announced in June 2025) to provide £5 billion in grant funding for infrastructure and land assembly to support housing projects, complementing the new National Housing Bank.
The fund will be available in 2026-27. London was the first major city to receive funding.
The loans will be available at an interest rate of 0.1% and have a duration of 25 years. They will be used to deliver the same social and affordable tenures and strategic priorities as funding under the Social and Affordable Homes Programme.
[2] As set out in a Written Ministerial Statement in January 2026, the loans will be made available to registered providers of social housing and will be administered by the GLA in London. Further details on the operation and delivery of the loans will be announced by MHCLG and GLA in due course.
[3] The Mayor’s housebuilding achievements in London since 2016:
- Under Sadiq – in 2024 – the highest number of affordable homes for social rent in a decade were completed.
- Since 2016, overall housebuilding completions in London have reached levels not seen since the 1930s – prior to the pandemic.
- Since 2018, more than 25,000 council homes have been built – or are being built – with the help of City Hall funding.
- Council homebuilding starts under the Mayor have hit the highest level than at any time since the 1970s. In 2023, it was more than double the rest of the country combined.
- City Hall analysis of official Government figures shows that more new homes have been delivered per year in London under Sadiq than any previous Mayor of London. An average of more than 36,000 homes per year have been delivered since he became Mayor in 2016. This is 10,000 more than his predecessor, who averaged 26,000 a year.
- In 2023, the Mayor exceeded the ambitious target set by the previous Government of starting 116,000 homes under his previous Affordable Homes Programme.
- There has been a rise of almost seventy per cent in affordable housing starts in the last year (2024-25) in London. The capital also saw the highest number of council homes completed since City Hall records began, with 3,690 new homes delivered.
- City Hall’s latest Housing in London Report 2025 shows that the number of council homes completed by London boroughs through GLA funded programmes is at its highest level since 2016-17.
- The same report shows there has also been an increase in affordable housing completions over the last year and more homes started for social rent across our city.
- Landlords in the capital also own more affordable homes now than at any point over the past 25 years, helping to boost much-needed housing availability for Londoners.
[4] Last year (October 2025), the Mayor and Housing Secretary Steve Reed announced that tens of thousands of Londoners are set to benefit from emergency measures to significantly ramp up housebuilding, unlock stalled sites and ensure more affordable homes are being built across the capital. Read more: https://www.gov.uk/government/news/new-measures-announced-to-ramp-up-housebuilding-in-london.
[5] Mayor’s Social and Affordable Homes Programme (AHP):
The Mayor has secured up to £11.7 billion in government investment to deliver the London Social and Affordable Homes Programme, which runs from this year to 2036.
The programme will support the delivery of thousands of new social and affordable homes across London, with the overall housing target for the programme to be confirmed after the initial bidding round in February 2026.
Funding is available to deliver projects that can start on site by March 2036 and complete by March 2039.
More information: https://www.london.gov.uk/programmes-strategies/housing-and-land/housing-and-land-funding-programmes/london-social-and-affordable-homes-programme-2026-36.