Mayor secures £750m settlement to support London’s house building

20 March 2013

The Mayor of London, Boris Johnson, has welcomed the Chancellor’s commitment of at least £750 million in funding to boost housing construction in London. The funding, announced in today’s budget, will provide thousands of Londoners with more help to buy their own home.

Responding to the Mayor’s calls for a stable and continuous investment in housing, the Chancellor today confirmed a minimum of £750 million for the Mayor’s First Steps programme, through a new Help to Buy product.

This new investment will allow the Mayor to offer low cost finance to help thousands more mid-income Londoners to buy their own homes. It will do this by reducing the deposit they require, while accelerating house building in the capital, helping support thousands of new jobs in construction, particularly with the one in sixteen SMEs in the sector.

Today’s move will help even greater numbers of hard working Londoners onto and up the housing ladder and is in addition to the £3 billion previously secured by the Mayor for housing projects in this investment round. This funding is already helping 50,000 Londoners through First Steps, as part of the Mayor’s commitment to build 100,000 affordable homes over two Mayoral terms.

The Mayor has been a strong advocate for increased infrastructure investment. Whilst welcoming the Chancellor's decision to allocate £3 billion a year from 2015/16, he will continue to make the case for still greater investment in road, rail and aviation infrastructure to grow London's and the UK's economy.

Mayor of London, Boris Johnson said: ‘London’s success and future prosperity is built by hard working men and women who need good quality affordable homes to live in. And with an ever greater share of Londoners' income being spent on housing and workers facing longer and more crowded commutes, I will continue to fight for a better deal for London as the our population approaches 9 million by the end of the decade.

'I welcome the Chancellor’s announcement, an announcement that will further enable us to tackle London’s biggest economic concerns head on. It must not be forgotten that the health of the UK economy depends on London, a City that now contributes a greater share of the UK’s economic output than at any point in our history.’

The Mayor has also applauded the Chancellor’s commitment to provide extra funding for the development of new homes for private rent, potentially unlocking stalled schemes and accelerating house building. He also supports the Chancellor’s move to raise the maximum discount for Right to Buy in London in recognition of the higher cost of home ownership in the capital.

The Mayor has also welcomed the Chancellor’s New Employment Allowance to help small businesses – many based in London.

In response to measures announced on Corporation Tax and the abolition of Stamp Duty on equity trading for high growth companies, the Mayor added “It is vital that we retain London’s status as the financial services capital of Europe, which is why I have lobbied strongly alongside London MPs and the London Stock Exchange for the removal of Stamp Duty on AIM for our thriving high-growth sectors. The cut in Corporation Tax is a welcome step in helping to keep London’s businesses competitive as we position ourselves in a growing global economy and we will press the case for further cuts including business rates in the future.”

Notes to editors

In addition to £750 million for First Steps, and building on the Mayor’s wider programme of work to stimulate house building, the Chancellor has confirmed the release of more surplus public land for construction, something the Mayor is well placed to support having already released 100 hectares of land for development with a gross development value of £1bn since assuming new housing and land responsibilities less than a year ago.

The Chancellor has also announced funding for the development of new homes for rent. This will provide equity and loan finance to developers to assist them through the construction and letting of new rented homes. This new funding is in addition to the £200m previously announced and a significant proportion of the total will go to schemes in the capital. The GLA is currently undertaking assessment for schemes in London and expects to announce successful schemes in coming weeks.

In his letter to the Chancellor ahead of the Budget 2013, the Mayor of London included a call for abolition of Stamp Duty on AIM, “as a way to enable investment in the companies that need it most. Stamp duty discourages investment in equities as it accounts for up to 65 per cent of the total transaction cost of purchase. I believe that abolishing this tax for the AIM market would lower the cost of capital, boost innovation and benefit the wider economy”