Low grant rates and other terms and conditions – including a ‘drop dead date’ forcing them to complete by the end of the programme or pay back the cash – were also unpopular. With Mr Johnson refusing to budge, social landlords voted with their feet. Just £400m of £1.25bn was handed out in the first tranche of allocations to build 18,000 homes, forcing City Hall emissaries into desperate phone calls to ask large providers to up their bids.

“The previous allocation was the low watermark on take-up of grant funding,” Paul Hackett, chair of the G15 group of London’s largest housing associations, tells Inside Housing.

Change of appetite

What a difference, then, three years has made. Last week, Sadiq Khan allocated £1.7bn to councils and housing associations for 50,000 affordable homes over the next four years, a little more than half of his affordable housing war chest of £3.15bn and 55% of the affordable homes he wants to fund in his first term. So why the change of appetite among London’s housing providers?

First of all, there is simply more cash on the table. Grants will be awarded at a rate of £60,000 per unit for homes let for a new low-rent product dubbed ‘London Affordable Rent’. This is almost three times higher than under post-2010 government programmes.

“We’re now seeing a renewed enthusiasm for grant funding from housing associations because the level of grant is at a more realistic level through different tenures,” says Mr Hackett.

With this extra cash, providers are able to offer rents that poorer tenants in London are better able to afford.

“I think housing associations also very much welcome the opportunity to build homes to cover different price points, so the inclusion of a lower-rented affordable London Affordable Rent product is very appealing to associations that see that as part of their social purpose,” Mr Hackett explains.

 

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2014

£400m

The amount handed out in the first tranche of allocations under Boris Johnson’s mayorship

 

2017

£1.7bn

The allocation for 50,000 affordable homes over the next four years under Sadiq Khan’s mayorship

 

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London Affordable Rent is based on the mayor’s benchmarks for affordability, which reflect the ‘target rent’ cap for social rent. While these benchmarks are considerably cheaper than the upper end of the previous regimes of ‘affordable rents’, they are also markedly higher than the average social rent in London for new lettings.

Depending on bedroom numbers, the benchmark is between 10% and 28% lower than regular ‘affordable rent’ in London, and between 10% and 43% higher than the average London social rent for new lettings, according to figures from the English Housing Survey. Nonetheless, it is a move in the right direction and a move far enough to entice providers to get involved.

More flexibility

Another crucial new feature of the mayor’s programme is the role of strategic partnerships, struck with L&Q, Hyde, Genesis, Clarion, Network Homes, Notting Hill Housing, Optivo and Peabody. The Greater London Authority (GLA) says these will deliver 38,500 homes, 77% of the total.

James Murray, deputy mayor for housing, says: “The fact the strategic partnerships have been so successful is a real endorsement of the approach that we’re taking where we’re being ambitious and supporting associations which are delivering that ambition.”

Associations involved in strategic partnerships are required to provide a higher proportion of affordable housing across their portfolios than associations receiving regular grants – 60% versus 50%. In exchange, they receive more flexibility on when they can draw down grants.

Helen Evans, chief executive of Network, tells Inside Housing: “It’s great that the GLA has been able to restructure the way that they’re organising the programme to pay grants at the start rather than at completion. The GLA has taken a very collaborative approach.”

The new-found bonhomie among housing associations is also down to a more flexible approach to the programme per se. As well as the London Affordable Rent products, 32,000 of the homes will be for either shared ownership or the product announced by the mayor last year – London Living Rent.

It will be up to associations to decide which to offer, based on the market at the time of completion and local circumstances.

Mr Hackett, who is also chief executive of housing association Optivo, said this feature was “incredibly important”.

Indeed, it was a major call by the sector on central government as it sought bids for its last shared ownership-dominated grant programme last year amid market uncertainty over Brexit.

There are still questions ahead – and the perennial one for those seeking to solve London’s housing crisis relates to land, which is still to be found for around half of the 50,000 homes.

Mr Murray says: “The targets we’ve set are ambitious. We’ll have to rely on having this more strategic relationship with housing associations where they can use the funding more flexibly and where we help them with land acquisition and with bringing together larger projects.”

Overall, though, this more congenial approach is currently serving both sides well. If the ambitious targets set out by Mr Khan are to be hit, continuing to work in tandem will be vital.

The initial funding allocations

Organisation name	Homes	GLA funding allocation
A2 Dominion	1,870	£80,776,000
Almshouse Consortium	86	£5,160,000
Brick by Brick (Croydon Council)	199	£5,572,000
Catalyst Housing	1,216	£41,024,000
City of London	244	£14,640,000
Clarion Housing Group	5,000	£168,300,000
Estuary Housing Association	76	£2,072,000
Evolve Housing & Support	49	£2,940,000
Genesis Housing Association	2,049	£70,712,000
Grainger Trust	34	£0
Hexagon Housing Association	223	£8,548,000
Home Group	45	£1,164,426
Hyde Housing Association	3,000	£102,000,000
Islington & Shoreditch Housing Association	124	£6,374,200
Lambeth & Southwark Housing Association	4	£240,000
L&Q	11,610	£394,740,000
London Borough of Enfield	148	£5,345,000
London Borough of Harrow	317	£12,620,000
London Borough of Havering	610	£30,296,000
London Borough of Hounslow	174	£9,004,000
London Borough of Lambeth	912	£54,720,000
London Borough of Wandsworth	71	£3,972,000
Look Ahead Care and Support	38	£2,400,000
Metropolitan Housing Trust	704	£18,376,000
Moat	50	£0
Network Homes	1,752	£45,756,000
Newlon Housing Trust	200	£5,600,000
Notting Hill Housing Trust	5,321	£176,386,962
Octavia Housing	833	£31,435,500
One Housing Group	686	£10,184,000
Optivo	2,600	£88,400,000
Orbit Group	347	£14,676,000
Paradigm Housing Group	134	£4,008,000
Paragon Community Housing Group	288	£1,265,600
Peabody Trust	6,000	£220,973,768
Poplar Harca	144	£6,016,000
Richmond Housing Partnership	475	£17,748,000
Sanctuary Affordable Housing	11	£308,000
Southern Housing Group	601	£20,338,000
Southwark Council	201	£12,060,000
Swan Housing Association	127	£5,092,000
Thames Valley Housing Association	418	£8,808,000
Wandle Housing Association	307	£7,472,000
YMCA Thames Gateway	100	£6,000,000