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London councils to receive up to £100,000 grant per home
London councils are set to receive a hugely increased grant rate of £100,000 per home for social rent, or London Affordable Rent, under Sadiq Khan’s new programme.
The funding prospectus for the mayor’s new programme revealed the scale of funding going into City Hall’s plan to revive council housebuilding in the capital.
As well as the £100,000 rate, grants will be £28,000 or £38,000 per home for London Living Rent or shared ownership, with the higher rate for homes started before 2020.
This is a significant increase on the £60,000 grant rate provided for social housing, mainly to housing associations, under Mr Khan’s latest Affordable Homes Programme.
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James Murray, deputy mayor for housing and residential development, told Inside Housing: “It’s a special grant rate recognising that we want to give councils the resources to kick-start their programmes.
“Also, councils are likely to have fewer resources from cross-subsidy than some housing associations might have in their programmes.”
The programme was announced this morning as the solution to the mayor’s ambition to get councils to build 10,000 homes over the next four years.
No set amount of money is available for councils under this programme, which will use funds from the mayor’s £1.67bn of affordable housing grant funding.
Instead, the Greater London Authority will consider bids from councils on how they intend to contribute to the 10,000-home target.
At a glance: the different types of rent in London
Picture: Getty
Social rent: The amount of social rent a person pays depends on the location and size of the property, and is set according to a complex formula, but it is typically set at between 50% and 60% of market rent.
Affordable rent: Introduced by the coalition government in 2011, ‘affordable’ rent can be up to 80% of market rent, although many associations have been charging lower than this.
London Affordable Rent: A tenure introduced by Sadiq Khan that is lower than national affordable rent and based on target rent levels towards which social rents are gradually being raised. This makes it higher than average social rents in the capital, but in line with the rent that would likely be charged if a new social rent unit was built and set according to the same formula.
London Living Rent: A rental product aimed at middle-income Londoners introduced by Sadiq Khan, with rents set at one-third of average local earnings.
Target rent: A social rent level calculated by the government, which council and housing associations should use to move their social rents to over time.
