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News from Siân Berry: Invest in young people, renters and key worker housing

Sian Berry on the roof of City Hall
Created on
27 January 2021

London’s renters, homeless young people and key workers affected by the coronavirus pandemic could be given some of the urgent support they need, if the Mayor takes up ideas proposed by Sian Berry AM as part of an amendment for the Mayor’s draft budget. [1]



The proposals include three fully-costed plans to tackle the housing crisis: helping emergency service workers struggling to afford London living costs, supporting the historic high numbers of young people who have become homeless during the pandemic, and backing renters in need of more support and protections.

Green Party London Assembly Member Sian Berry says:



We need fresh thinking on housing in City Hall and this amendment breaks new ground and provides practical, fully-financed proposals to ease the worst pains of the housing crisis.



“We all clapped for nurses, carers, shop workers and police officers, and our proposals would do something real to pay tribute to their work and their needs.

“This idea is a simple first step to fill a gap in current City Hall thinking. It makes use of unallocated grant money to buy existing homes for rent to key workers on average incomes, at London Living Rents they can genuinely afford.



“And with the rents we receive we can take a further step and borrow to buy even more homes too. With a total of nearly 2,000 affordable homes for key workers, this is a sustainable, workable plan, which the current Mayor is not yet looking at.



“Over the last year we have seen the number of homeless young people rise, and this must be addressed by City Hall. Our plans find £1.2 million to provide as many dedicated bed-spaces for Londoners under 25 as possible, along with wider support.



“For the second year, we have also proposal financial support for London’s independent renters’ groups, with £1.5 million in grants to help them develop and grow. The Mayor has adopted many of our good ideas in the past five years, but he hasn’t picked this one up yet.



“I hope the Mayor will look at how the proposals help to fill important gaps in his plans, when it comes to his final budget next month.



The coronavirus pandemic has deepened London’s housing crisis but, even before the city was battered by the current emergency, vital ‘blue light’ workers were already being priced out of living in the city.



Sian’s own research found half of all our police officers live outside the capital and the The Royal College of Nursing surveyed their members and found London’s high cost of living was forcing nursing staff out of the capital. [2] [3]

Today’s proposal would start to reverse that trend by acquiring new London Living Rent homes specifically for key workers. The first stage would buy homes outright from new developments intended for market sale, using unallocated housing grant money. The second and third stages would use income from these to finance prudent borrowing for further acquisitions.



Coronavirus restrictions have also exposed inadequate support for homeless under-25s, and youth homelessness has hit an historic high. [4]

The plans backed by Sian would create youth-specific bed spaces in homeless accommodation, something that does not yet exist in any meaningful way, along with wider support.

The amendment also includes a large funding pot for renters’ rights groups to develop and grow as more and more people living in the private rent sector need help as furlough payments don’t always cover their rents. This is the second year the Green amendment has put forward an idea for development grants to independent groups who provide practical support to renters.

Notes to editors

Sian is available for interview.



The three stage key worker housing plan Sian proposes would use existing City Hall housing funding and new borrowing to provide 1,919 key worker homes at London Living Rent over two financial years in stages (details extracted from reference 1):



* Stage 1 - Q1 and Q2 2021-22:  Using housing grant money, we will use £400 million to purchase 907 homes at an average cost of £441,000. These will be managed   under agreements with councils and housing associations and rented as London Living Rent homes to key workers.    



* Stage 2 - Q3 and Q4 2021-22:  By Q3, rental income from these homes will be able to sustainably finance further borrowing of £447 million (at current PWLB borrowing rates of 1.84 per cent).     We propose to borrow half this amount, £223 million, in 2021-22 and estimate another 506 LLR homes for key workers will be added to the GLA key worker housing stock in the second half of 2022.   



* Stage 3 - 2022-23:  In 2022-23, further borrowing on the strength of the rental income from the Stage 1 homes will finance borrowing of another £223 million to purchase a further 506 homes.    



* Stage 4: This key worker homes scheme will break even in revenue terms in 2021-22 and will generate a surplus income of around £11.9 million during 2022-23 from rental payments after management and finance costs are met. This income would initially be kept in a new Key Worker Homes Finance Reserve. 

 

Table A: Financial year 2021-22 

Item 

Number of homes acquired 

Income 

Spending 

Borrowing 

Stage 1: AHG funding released and spent 

907 

 

£-400,000,000 

 

Gross rental income Q3 and Q4 2021-22 

 

£5,477,551 

 

 

Less contract and management costs at 25 per cent 

 

 

-£1,369,388 

 

Stage 2: Borrowing against Stage 1 rental income 

506 

 

-£223,269,743 

£223,269,743 

Financing costs in-year for Stage 2 homes 

 

 

£-4,108,163 

 

 

 

 

Table B: Financial year 2022-23 

Item  

Number of homes acquired 

Income 

Spending 

Borrowing 

Stage 3: borrowing against Stage 1 rental income 

506 

 

-£223,269,743 

 

£223,269,743 

 

Gross rental income during 2022-23 from Stage 1 homes 

 

£10,955,102 

 

 

Gross rental income during 2022-23 from Stage 2 homes 

 

£6,114,857 

 

 

Gross rental income during 2022-23 from Stage 3 homes 

 

 

£6,114,857 

 

 

Less contract and management costs at 25 per cent 

 

 

 

-£3,057,429 

 

Finance costs in year for Stage 2 borrowing 

 

 

 

-£4,108,163 

 

Finance costs in year for Stage 3 borrowing 

 

 

 

-£4,108,163 

 

Net revenue surplus  

 

£11,911,061 

 

 

 

[1] City Hall Greens full amendment proposals, Jan 2020



https://www.london.gov.uk/about-us/london-assembly/assembly-members/publications-caroline-russell/publication-caroline-russell-city-hall-greens-budget-amendment-2021-2022

 

[2] Living in the red. Royal College of Nursing, Jan 2020

https://www.rcn.org.uk/professional-development/publications/pub-009012

 

[3] Where do our police officers live? Sian Berry AM, Jun 2016

https://www.london.gov.uk/sites/default/files/sian_berry_police_housing_report_jun2016.pdf



Commuting Cops – Where do our police officers live in 2018? Sian Berry, Oct 2018

https://www.london.gov.uk/sites/default/files/2018_10_24_sian_berry_commuting_cops_fact_sheet.pdf

 

[4] Rough sleeping in London (CHAIN reports). GLA, last updated three months ago



https://data.london.gov.uk/dataset/chain-reports

 

 

 

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