London mayor will use capital’s housing budget to boost ownership
Boris reveals his plans to thaw frozen market
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Boris Johnson has unveiled plans to use London’s £5 billion housing budget to ‘kick-start’ the market and boost affordable homeownership by a third.
The Conservative London mayor’s draft housing strategy confirmed his desire to scrap the city’s 50 per cent affordable target for new housing. It will be replaced by numerical targets negotiated individually with each borough.
And his First Steps programme, aimed at middle-income households, will increase the upper income threshold for low-cost homeownership from £60,000 per year to £72,000.
The programme will also allocate £130 million from the capital’s affordable housing budget for 2008/11 to fund new ‘intermediate housing’ products, which could include discounted market sale, shared ownership, or intermediate rented homes.
Other elements of the strategy include new ways to invest public land and money, in an effort to stop home building in London grinding to a halt during the downturn.
Mr Johnson said: ‘The housing market is frozen.
‘There is a tundra, a permafrost at the moment caused by the credit crunch, and it’s our job to jackhammer through it.’
Other proposals include releasing large quantities of public sector land for house building, in ways that minimise risk and upfront costs for developers. They also include using some of the Homes and Communities Agency’s London budget to gap-fund developments at risk of being mothballed during the downturn.
The HCA money would be used as investment, not grant, to unlock schemes where there is proven demand but developers are struggling to get finance. The strategy proposes funding the purchase of unsold private stock to use as ‘intermediate’, or sub-market, rental properties, which could later be converted to shared ownership or outright sale homes. But housing professionals and political opponents warned it was the wrong time to promote homeownership over social housing.
Nicky Gavron, the Labour chair of the London Assembly planning and housing committee, said there were already more than 9,000 low cost homeownership properties lying empty – the bulk of them in London. ‘Until the housing market stabilises and there are mortgages available, these homes will stay empty and unsold,’ she said.
Belinda Porich, head of the National Housing Federation’s London region, said there was a danger First Steps could come ‘at the cost of those in even greater need’.
She called for each borough to be given a target for social housing, rather than just affordable housing.
The strategy says 30,000 of the 50,000 affordable homes Mr Johnson wants to deliver by 2011 will be socially rented. But as Inside Housing reported last week, no tenure mix will be prescribed to boroughs.
The mayor’s housing strategy at a glance
- London-wide 50 per cent affordable target to be scrapped.
- 50,000 affordable homes promised by 2011, 30,000 of them for social rent.
- Increase low-cost homeownership by a third.
- Raise upper income limit for affordable homeownership from £60,000 per year to £72,000, for households with two breadwinners.
- Provide £130 million for development of new ‘intermediate housing’ products, including intermediate rent.
- Unfreeze the house building market in London by using Homes and Communities Agency money to gap-fund developments at risk of being mothballed, in return for equity stakes.
- Release London Development Agency and Transport For London land for housing development, to reduce upfront costs for developers.
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