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Six partnerships announced as £490m grant allocated
Six partnerships have been announced with eight housing associations in London, as almost £500m of grant is allocated to fund close to 10,000 affordable homes in the capital.
Sadiq Khan, the mayor of London, today announced the latest partnerships – which see housing associations given flexible funding conditions in exchange for their agreement to deliver at least 60% of their new homes as affordable housing.
It came as the mayor’s office also announced the allocation of £490m of housing grant – including the strategic partnerships – which will bankroll the construction of 9,937 affordable homes.
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Of these, 4,291 will be at London Affordable Rent benchmarks or lower (a rate which is based on the same formula as social rents), while the remainder will be London Living Rent or shared ownership.
The strategic partnerships will be with:
- Connected Partnership (a three-way partnership of Octavia, Origin and Shepherds Bush Housing Group) which has promised 525 additional affordable homes and a total of 1,408 affordable homes and will receive £27m of grant
- Guinness Partnership, which has committed to 1,750 homes, and will receive £74.3m of grant
- Home Group, which has committed to an additional 955 homes and a total of 1,000, and will receive £46m of grant
- Metropolitan Thames Valley, which has committed to an additional 952 homes and a total of 2,000, and will receive £40m of grant
- One Housing Group, which has committed to 1,042 additional homes and a total of 1,692, and will receive £53m of grant
- Swan Housing, which has committed to 1,375 additional homes and 1,500 in total, and will receive £70.5m of grant
In total the six strategic partnerships amount to 63% of the £490m of allocations announced today. They join A2 Dominion, Catalyst, Clarion, Hyde, L&Q, Network, Notting Hill Genesis, Optivo and Peabody as the mayor’s ‘strategic partners’.
The London programme of strategic partnerships is separate to a parallel programme across the rest of England being run by Homes England.
City Hall allocated £1bn specifically for council homes last month, meaning there are now allocations in place for 105,000 affordable homes by 2022. The mayor has a target of 116,000 affordable housing starts by 2022.
The mayor has announced almost £4.5bn of funding for housing in his tenure: today’s announcement of £490m, £1.7bn to build 50,000 homes in July last year, £288m to five previous strategic partnerships in August, £1bn to councils in October, and £979m in funding from previous streams first announced under his predecessor Boris Johnson.
There is £500m remaining to be allocated, taking recycled grant into consideration - a City Hall source confirmed.
James Murray, deputy mayor for housing and residential development, said: “I’m very pleased to announce our six new strategic partners, as this approach has proved successful in pushing what we can achieve together since we first introduced strategic partnerships two years ago.
“Together we now also need to make the case to ministers that government needs to step up and dramatically increase the funding available for affordable housing, and grant the mayor new powers to allow him to bring forward land and build the homes Londoners so desperately need.”
Richard Hill, chief executive of One Housing Group, said: “We are delighted that One Housing has been announced as one of the six new strategic partners. We look forward to working with the Greater London Authority to deliver more genuinely affordable homes for Londoners.”
Listen to a podcast on Sadiq Khan’s housing record:
In an unusual move for a grant programme, two housing associations (Keniston and Poplar Harca) have been given grant for just a single London Affordable Rent home, while two more (Islington and Shoreditch, Phoenix Community and YMCA Thames Gateway) have been offered funding for less than 10.
London Affordable Rent is set according to social rent ‘target rent’ benchmarks – the level towards which social rents are being slowly increased through a process known as rent convergence.
This means they are set using the same formulas as social rents, but they are higher on average than existing socially rented homes.
The additional allocations announced today are set out in the table below:
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.
