Mayor launches new plan to deliver thousands of rent-controlled, affordable homes for London’s key workers

• Sadiq meets 2024 manifesto pledge with launch of new plan to start at least 6,000 rent-controlled ‘Key Worker Living Rent’ homes in London by 2030
• New homes will be let at rents based on 40 per cent of key workers’ average net household incomes – saving those with a two-bedroom home around £7,000 a year, on average
• Sadiq calls on private developers, housing associations, councils and investors to get behind the plans by developing these homes, including bidding for funding through the Mayor’s Affordable Homes Programme

The Mayor of London, Sadiq Khan, has today launched new plans to deliver thousands of rent-controlled, affordable homes across the capital, potentially saving key workers including teachers, nurses, carers and bus drivers thousands of pounds in rent each year. [1]

Today’s announcement builds on the progress the Mayor 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.

On average, Sadiq is delivering over 10,000 more new homes in the capital each year than the previous Mayor [2] and since 2018, more than 25,000 council homes have been built – or are being built – with the help of City Hall funding. Alongside this, the Mayor is continuing to work closely with the Government on a series of time-limited, emergency measures to unblock housebuilding and boost affordable housing.

This innovative scheme is specifically aimed at Londoners working in key worker roles, including those at the start of their careers, who are unlikely to secure social rented homes but who struggle to afford a home that meets their needs in the private market. Currently, key workers account for around a third of Londoners who work. They include both private and public sector occupations. [3]

It could save Londoners thousands of pounds each year when compared to average private sector rented homes, based on data from the Office of National Statistics’ (ONS) Price Index for Private Rents [4]. For instance, those living in a one-bedroom home could save nearly £4,500 each year, while those in two-bedroom homes could save around £7,000.

These homes will offer an affordable option for long-term rent and there is no expectation for tenants to buy a share of their home, either at the outset, or after a period of saving for a deposit. The approach to rent setting and increases is simpler than other forms of affordable housing such as Shared Ownership. The Mayor hopes this will benefit both tenants and potential developers and providers.

The scheme, which will see up to 6,000 new homes started in London by 2030, will also include homes for sharers, which the Mayor intends to be a valuable option for single Londoners who would otherwise struggle to afford to rent a Key Worker Living Rent home on their own.

Sadiq made a manifesto pledge to introduce new rent control homes with rents capped and linked to the incomes of key workers. He has developed plans for these homes, known as the ‘Key Worker Living Rent’ homes, as part of his wider and ongoing commitment to make housing more affordable for Londoners amid the rising cost of living.

The Mayor is urging housing associations and councils to work with City Hall and bid for funding for Key Worker Living Rent homes through his Affordable Homes Programme, which has received record £11.7 billion investment from Government for affordable homes in London over the next 10 years. This is the biggest and longest investment the capital has ever received and it will help to deliver the social and affordable homes that Londoners so desperately need. Sadiq is also calling on investors to partner with the public sector to help build homes for key workers. [5]

The Mayor of London, Sadiq Khan, said: “Key workers, including teachers, nurses and bus drivers, play a critical role in keeping our city moving, working around the clock to deliver vital public services for millions of Londoners. It is only right that these hardworking Londoners can afford to live in a decent, safe home in the city they are serving.

“That’s why I’m proud to launch my innovative ‘Key Worker Living Rent’ scheme, which will help NHS staff, police, firefighters and others into thousands of affordable homes for long-term rent, saving potentially thousands of pounds each year.

“I will continue to work closely with Government and partners to do everything I can to accelerate the delivery of affordable homes, as we build a better and fairer London for everyone.”

Haringey Council Leader, Cllr Peray Ahmet, said: “We welcome the announcement from the Mayor of London to deliver thousands of rent-controlled affordable homes for key workers. This is a major step forward in the mission to build genuinely affordable housing in Haringey and London.

“Our nurses, carers, teachers, council workers, firefighters, police officers and other key workers are the backbone of our community.

“We are building thousands of council homes in Haringey – 1,000 already and at least 3,000 by 2031 – which provide council rents to those in the greatest need.

“We want to build genuinely affordable homes for key workers in Haringey too, with rents that are tied to real wages. The Mayor’s plan for Key Worker Living Rent homes will be essential for us to drive this forward.”

Cllr Helen Dennis, Cabinet Member for New Homes and Sustainable Development, at Southwark Council said: “Keyworkers are the backbone of any community and ensuring that their work is recognised and that local public services are well supported is absolutely vital. That is why Southwark is 100% committed to the Mayor’s pledge on affordable, rent-capped homes for keyworkers, and is at the forefront of delivery, with our pilot plans for over 150 Keyworker Homes in Bermondsey making excellent progress.

“Creating affordable housing in London at the moment is certainly a challenge but we are dedicated to meeting this challenge head-on with support from the Mayor of London.”

Oliver Campbell, Managing Director, Bouygues UK, said: “Providing keyworkers with affordable homes is a vital step in supporting those who are indispensable to our communities. Bouygues Development, the property development arm of Bouygues UK, Funding Affordable Homes Housing Association, and the London Borough of Southwark are working in partnership on an anticipated grant funding bid to the GLA to help provide key worker accommodation in the Borough. Bouygues UK is proud to have submitted a planning application for a pilot scheme of 152 new key worker homes in Bermondsey. All the partners fully support the GLA’s objective to provide more affordable homes that will keep key workers in our city, and afford them a better quality of life close to where they work.”

Olivia Harris, Chief Executive Dolphin Living, said: “Key workers are the backbone of London yet too many face rising housing costs that push them further from their communities and into long commutes. Providing genuinely affordable, high quality homes close to where people work is essential to retaining this workforce, protecting the social fabric of our neighbourhoods and safeguarding the capital’s long-term competitiveness. Dolphin Living has long championed the delivery of affordable housing for critical workers in the Capital and we welcome the Mayor's announcement today.”

Ben Twomey, Chief Executive of Generation Rent, said: “Soaring rents have made London the most expensive place to live in Europe. Key workers are the backbone of our communities. They care for us when we are sick, build the homes we live in, keep essential services running and educate our children. Yet many are being priced out of the very city they serve.

“It’s right that the Mayor of London is exploring new ways to protect key workers from sky high rents and to provide more stable, genuinely affordable homes. Controlling the rents of key workers is a positive first step towards a fairer approach for all of London’s renters.”