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London recovery taskforce discussing ‘forward funding’ for housing schemes
City Hall’s coronavirus housing recovery taskforce is discussing “forward funding” for large developments so they can go ahead despite the economic risks arising from the pandemic.
Deputy London mayor for housing Tom Copley set up the group last month to work on a recovery plan for housebuilding in the capital amid concerns about COVID-19’s impact on delivery and the market.
The taskforce is made up of senior figures representing housing associations, councils and house builders. It has now met twice.
A key part of its discussions so far has been the possibility of allocating grant funding for rented homes in developments earlier than usual to minimise their dependence on income from housing for sale.
This approach – which would require consent from government – would reduce the risk of pushing ahead with large projects for individual organisations.
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Helen Evans, chair of the G15 group of major London housing associations and chief executive of Network Homes, said: “There has been quite a lot of discussion around whether flexibility can be given to forward funding rented homes in the programme to take out sales risk.
“We all want to contribute to economic recovery, but the difficulty with the cross-subsidy model is managing risk on projects which are sales-dependent.
“Boards will need large imminent projects de-risked in the short term in order to sign up to them.
“There are already quite a lot of unsold homes in London, and in any event a lot us were already saying the cross-subsidy model is stretched to its limits.
“If we were able to apply grant that is already allocated to housing to rented homes now, we could balance the programme out with sales when market conditions are clearer.”
Accelerating funding for replacing dangerous cladding could also help speed up work to produce the “multiplier effect associated with construction” while making buildings safer, she added.
Mr Copley said: “For me this isn’t just about managing the crisis, it’s about transforming housing policy as we come out of it.
“We’re trying to get all partners together to come up with a set of proposals that we can go to the government with.
“Given the current situation, there’s clearly a very strong case for greater flexibility over affordable housing funding.”
He added that he would like the Greater London Authority and councils to be given stronger Compulsory Purchase Order powers to buy brownfield sites for housing development at lower prices.
The London Tenants Federation has expressed anger that no resident representatives have been invited to join the taskforce.
Analysis by Savills estimated that coronavirus has led to construction being halted on sites involving 28,600 homes in London, equivalent to 79% of total supply in 2018/19.
But many sites have since returned to work with the government’s encouragement.
Ms Evans said that at one point only three of Network Homes’ 18 construction sites were open, but work is now continuing at 16 with safety measures in place.
The taskforce is discussing how immediate challenges to development – such as personal protective equipment shortages and enforcing social distancing – alongside planning for longer-term recovery.
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