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A turning point for London
 
This week L&Q has sealed a landmark strategic partnership with the Greater London Authority which could herald a turning point for the capital’s housing crisis.
 
The partnership – the first of its kind between City Hall and a housing association – will see £8 billion invested to build 20,000 new homes across the capital. Crucially, the target is for 60 per cent of these homes to be genuinely affordable.
 
City Hall will be contributing £400 million to help us get the homes started by 2021. The grant will boost affordable housing delivery, and assist with land purchases and infrastructure costs.
 
This is the first allocation of the Mayor of London’s £3.15 billion affordable housing funding agreement secured from the Government, which it is hoped will eventually see the delivery of 90,000 affordable starts over the next five years.
 
For L&Q, this is an incredible opportunity to double our development pipeline in London.
 
Of course, we recognise that the housing crisis is a national issue. Over the last year we have entered into a joint venture partnership with Trafford Housing Trust to deliver 2,000 new homes in the North West, and our acquisition of Gallagher Estates has given L&Q access to 42,500 plots of land across the South and South Midlands bringing our total pipeline to over 90,000 homes.
 
London, however, has been L&Q’s heartland for more than 50 years and it is here that the crisis is most acute.
 
When we completed our merger with East Thames last December, we confirmed our ambition to build 100,000 new homes, and we want as many of these as possible to be in London.
 
Over the last five years we have invested more than £2 billion in new homes across London, but we have been telling Government and City Hall that we have the ambition and capacity to invest even more if we can develop meaningful partnerships.
 
L&Q and the GLA have been forging closer ties over many years, but this new partnership can be a game-changer.
 
Achieving such an ambitious increase in our London pipeline will involve considerable effort and risk management for L&Q, so the partnership provides additional flexibilities in the drawdown and use of the £400 million grant.
 
The GLA will make available to us the full allocation of grant for 12,000 affordable homes, and we will be able to draw on this sum flexibly to support the overall programme. Funding will not be restricted to the customary tranche payments associated with the mainstream programme, nor will it be restricted to “firm” schemes.
 
L&Q and City Hall will work together to identify appropriate opportunities for the use of this fund including land purchases, infrastructure and other pre-development costs.
 
L&Q will acquire sites to support the programme using the GLA fund to contribute to acquisition costs.  Then we will diligently pursue the necessary consents to make a start on site before March 2021.
 
We both recognise that a skills shortage poses a real risk to our development ambitions, particularly post-Brexit. Therefore, in addition to the new homes, L&Q has committed to making a significant new investment in construction skills and training, which City Hall will look to match.
 
Nobody can fix London’s housing crisis alone, and the Mayor of London, Sadiq Khan, acknowledges that it will be a marathon rather than a sprint. By working together though, L&Q will guarantee more investment in apprenticeships, jobs, innovative methods of construction, economic growth, communities and homes for years to come.
 
The Mayor has now called on other housing associations to form similar large-scale partnerships with City Hall and build thousands more affordable homes at pace.
 
If his rallying cry is heard, this could just be a turning point for London’s housing crisis.
 
Jerome Geoghegan, Group Director of Development and Sales, L&Q
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