Sadiq Khan to kickstart major council homebuilding comeback in London

16 May 2018
  • Mayor to support councils in starting 10,000 new council homes over the next four years
  • Sadiq offers special funding from £1.67bn pot and expertise to help boost building of council homes
  • Innovative new approach to help councils replace homes sold through Right to Buy

 

The Mayor of London, Sadiq Khan, today gives a major boost to councils in their plans to get building again with his new programme to help get 10,000 new council homes underway over the next four years.

 

In what will be the first ever City Hall programme dedicated to supporting council housing, Sadiq is using funds from the £1.67bn he secured from government in the Spring Statement to help support London’s councils to increase dramatically the rate of council homebuilding in the capital.

 

The Mayor, who grew up on a council estate, is determined to point the way towards what he believes is needed to truly fix the housing crisis: a modern comeback for council housing.

In the 1970s London councils were supported by central government and built more than 20,000 homes a year, but that number plummeted to almost zero during the 1990s. Today, councils’ ambitions are hamstrung by central government rules and funding cuts, meaning they are able to contribute less than two per cent of London’s new homes per year. London councils built 2,100 homes over the last seven years, including 300 that were completed last year.‎

 

While the government continues to drag its feet in freeing councils to build, Sadiq is leading the way by using his powers and resources to help councils across London go as far as they can. Alongside offers of greater expertise and flexibility over funding, he is offering councils the opportunity to bid for grant funding at a special rate – the first time this has ever been done - which will allow them more easily to offer new homes based on social rent levels. 

 

This will make a real difference to the tens of thousands of Londoners on social housing waiting lists. Sadiq is looking forward to working closely with newly-elected council leaders and council Mayors to start more homes for social rent.

 

In a sign of the programme’s ambition, the Mayor today welcomed the first deals struck under Building Council Homes for Londoners with Waltham Forest council leader, Councillor Clare Coghill, the new Mayor of Lewisham, Damien Egan and Mayor of Newham, Rokhsana Fiaz. Waltham Forest plans to start 525 new council homes with £26m of funding from City Hall over the next four years, while both Newham and Lewisham have each committed to starting 1,000 new council homes by 2022. 

 

As part of Building Council Homes for Londoners, Sadiq has criticised the government for failing to give councils the freedoms they need to ensure all those homes sold under Right to Buy rules are replaced. His programme offers councils an innovative way to ringfence their Right to Buy receipts to help them build new homes to replace those sold in the local area.

 

Right to Buy was introduced in 1980 and, according to Ministry of Housing, Communities & Local Government figures, it has resulted in 306,000 social homes sold by councils in London since 1980. During the same period, councils have built only 62,000 homes at social rent – equivalent to just one in five of those homes sold being replaced.

 

The Mayor of London, Sadiq Khan, said: “I grew up on a council estate and I know first-hand the vital role social housing plays in London. Council homes for social rent bind our city together, and they have been built thanks to the ambition of London’s councils over many decades.

 

“Back in the 1970s, when I was growing up, London councils built thousands of social homes, providing homes for families and generations of Londoners. But the government has turned its back on local authorities, severely hampering their ambition to build by cutting funding and imposing arbitrary restrictions on borrowing.

 

“I am proud to launch Building Council Homes for Londoners – the first ever City Hall programme dedicated to new council housing. I want to help councils get back to building homes for Londoners again, and I’m doing that with support from the £1.67bn fund I secured from government to help get 10,000 new homes underway over the next four years.

 

“I am offering councils expertise and resources from City Hall to scale up their homebuilding programmes, and I will help them to replace homes sold through Right to Buy. The government is failing to enable councils to replace the hundreds of thousands of council homes sold through Right to Buy, and so I will do all I can to help councils replace as many of them as possible.”   

 

Building Council Homes for Londoners will support councils to enhance their capacity to deliver large-scale new-build programmes with skills, expertise and resources from City Hall. The Mayor also continues to lobby the government to help London’s councils access increased borrowing limits from central government and providing them with greater flexibility.

 

Waltham Forest Council Leader, Clare Coghill, said “This money will give a massive boost to the number of council homes we can build helping to reduce the thousands of people on our housing waiting list and achieve our priority of putting a decent roof over our resident’s heads.

 

“Working with the Mayor of London, Sadiq Khan, we are doing all we can to reduce the effect the housing crisis has on families and individuals but we need the Government to do more to help us build the homes that London so desperately needs.” 

 

The Mayor of Lewisham, Damien Egan, said: "I am delighted to support the launch of this vital new housing initiative from the Mayor of London. Building Council Homes for Londoners shows how councils and City Hall can work together to tackle the housing crisis and I confirm today that Lewisham will be a dedicated partner to Sadiq in delivering the new Council homes that we need.


"Lewisham is committed to building new and genuinely affordable Council homes in our borough with stable and secure tenancies. We will deliver 1,000 more new social homes in Lewisham, which is just one part of our wide ranging approach to tackling the housing crisis."

 

Mayor of Newham, Rokhsana Fiaz OBE said: “Tens of thousands of Newham families are in desperate need of affordable, quality homes. I share the Mayor of London’s commitment to kick-start major council housebuilding in the capital as the only way we can realistically tackle the housing crisis. As the new Mayor of Newham, I have pledged to build at least 1,000 new Council homes at social rent levels in the next four years.

 

“This proposal to allow councils like Newham rather than central government to keep the money collected from Right to Buy and spend it on social housing is an extremely helpful first step. It allows us to try and address the problems the failed Right to Buy policy creates in reducing affordable social housing. I look forward to working closely with the Mayor of London to deliver more quality, social homes for Newham residents.”

 

The Building Council Homes for Londoners programme will be delivered through ambitious strategic partnerships between the Mayor and councils. The Mayor recognises that each council has its own priorities and is offering flexible funding and tailored support from City Hall.

 

Councils will submit funding bids through the City Hall website here: https://www.london.gov.uk/what-we-do/housing-and-land/gla-open-project-system-gla-ops before the deadline of 30 September, with allocations set to be announced before the end of the year.

 

  • Ends –

Notes to editors

Last year, Sadiq broke the City Hall record for both the number of genuinely affordable and social homes started in a single year even with his new tougher definition of what is affordable.

 

In 2017/2018, his ‘Homes for Londoners’ programme saw 12,526 genuinely affordable homes started – more than in any year since City Hall took control of housing investment. Crucially this included 2,826 new homes based on social rent levels – up from zero homes for social rent in the pipeline inherited from the previous Mayor.

 

The Mayor secured £1.67bn from central government in the Spring Statement on 13 March. It means since becoming Mayor, Sadiq has secured £4.82bn from government for 116,000 affordable starts by 2022.

 

Building Council Homes for Londoners includes a commitment to start building at least 10,000 new council and Right to Buy replacement homes by 2022. The programme will be focused on homes based on social rent levels, and will include homes in receipt of funding through this and other GLA programmes, as well as homes the Mayor is supporting councils to build by other means.

 

Social rent

 

Current London Affordable Rent benchmarks

 

2018-19 benchmark

Bedsit and one bedroom

£150.03

Two bedrooms

£158.84

Three bedrooms

£167.67

Four bedrooms

£176.49

Five bedrooms

£185.31

Six or more bedrooms

£194.13