You are viewing 1 of your 1 free articles
Social and affordable home targets in London could cost £54bn, new research finds
Building 120,000 social and affordable homes in London to meet the government’s targets could cost £54bn, new research by the G15 has found.
Its latest report, Increasing London’s affordable homes, the group of the capital’s largest landlords found that Labour’s plan to build 400,000 new homes in London over the next five years must include at least 120,000 social and affordable homes to meet the targets outlined in the Greater London Authority’s 2017 Strategic Housing Market Assessment (SHMA).
The SHMA found that when backlog need, affordability and the likely rate of second and vacant homes are taken into account, the net requirement for new homes in London between 2016 and 2041 is estimated to be around 65,900 homes a year.
Of this total, 47% would need to be social rent and affordable rent.
READ MORE
It found that each new social and affordable home is estimated to cost £450,000, with the total cost to deliver potentially reaching £54bn.
As a result, G15 members have seen a 76% drop in housing starts in London in 2023-24, compared with last year.
The group is calling for reforms that would allow housing associations to build more, “generating huge savings for government”, while “ensuring every penny raised is reinvested into more affordable homes”.
It said that despite a sharp drop in government funding – from 75% in the 1990s to 12% today – landlords have leveraged private capital to continue delivering affordable homes.
However, the group said that “years of policy chaos”, rising costs, alongside the need to upgrade existing homes has forced housing associations to scale back new homes.
Fiona Fletcher-Smith, chair of the G15, said: “The need for new homes in London is clear, but it’s essential that the government doesn’t lose sight of the importance of social and affordable housing in this plan.
“We’ve seen a decline in the number of new social homes in recent years, and this trend must be reversed. Housing associations are ready to step up, but we need government support to unlock the private finance that will make Labour’s target a reality.”
The G15 is urging the government to implement reforms that would allow housing associations to scale up their efforts, including a long-term rent settlement to provide financial certainty, addressing the “unfair disparities” in rent levels between new and existing tenants through rent convergence, and granting housing associations access to the underused Building Safety Fund.
It said that without these changes, housing associations will struggle to meet the demand for social and affordable homes while also maintaining safety standards in their existing stock.
Ms Fletcher-Smith said: “Housing associations are not-for-profit entities, which means every penny we generate goes back into building and maintaining homes,
“We have the capacity to unlock billions in private finance, but we need the government to act now. With the right support, we can play a key role in meeting Labour’s housing goals and ensure that London’s future is more affordable and secure for all its residents.”
A Ministry of Housing, Communities and Local Government (MHCLG) spokesperson said: “The government will deliver the biggest increase in social and affordable housebuilding in a generation, and we have already set out plans to introduce new flexibilities in the affordable homes programme so the Greater London Authority (GLA) can unlock delivery in London.
“We will set out plans at the next fiscal event to give councils and housing associations the rent stability they need to be able to borrow and invest in both new and existing homes, while ensuring there are appropriate protections for both existing and future social housing tenants.”
Sign up for our development and finance newsletter
Already have an account? Click here to manage your newsletters
