Boris Johnson unveils £5 billion investment strategy to bolster London's housing market » Housing » 24dash.com

Mayor of London Boris Johnson has today announced a £5 billion investment plan to support the capital's housing market over the next three years.

The Housing Strategy aims to boost the construction sector in London during the economic downturn, support the industry to deliver new affordable homes, and provide more sustainable routes to home ownership.

The strategy includes a range of innovative ideas that will replace outdated policies, which the Mayor claims no longer apply to the current housing market and economic climate in London.

According to Boris Johnson, today's announcement represents a fresh approach, embracing new opportunities provided by the Homes and Communities Agency London Board, which will be chaired by the Mayor.

The draft strategy will see the Mayor working closely with the Homes and Communities Agency (HCA), investing nearly £2 billion every year from the London housing budget to deliver new homes and improve existing homes.

In a break from conventional thinking, investment will be directed into new ways of delivering homes to tackle the credit crunch. Funding will be used to kick-start stalled developments in London, to acquire unsold market homes for affordable housing and to bring forward public sector land for new development.

In addition funding will be used to develop subsidised rent and rent-to-buy schemes, which could be sold at a profit or turned into permanent affordable homes when the upturn arrives.

Through the strategy’s ‘First Steps’ programme, the Mayor wants to increase the opportunity for home ownership in London by raising the household income limit to £72,000 for low cost ownership schemes and by simplifying access to them.

This would enable any household earning at the basic rate of income tax to qualify and is a clear move away from eligibility based on employment categories.

The Mayor also wants to cut the numbers of people living in temporary accommodation by delivering thousands of new homes for social rent and introducing more flexible schemes for social tenants who aspire to own their home or want to move elsewhere in the capital.

The strategy aims to initiate a big increase in the number of family sized homes available to rent and to buy, and aims to double the number of accredited landlords in the private sector to protect rights for tenants.

The Mayor said: “The strategy focuses not only on the issues facing the housing market in these difficult times but the historic problems of affordability, homelessness and overcrowding.

"It is designed to meet the needs of Londoners aspiring to get a foot on the housing ladder. For far too long London’s finest have been priced out of the capital’s housing market and, as a result, forced out of town with the capital losing their skills and expertise.

“These plans aim to put London on a strong footing for the eventual upturn in the housing market. By enabling ordinary Londoners to move from being subsidisers to being investors in new homes, we will provide timely support to a struggling development sector and can expect a return on our investment in years to come.”

Underpinning the strategy throughout is a commitment to delivering all new homes to the highest design and environmental standards.

While welcoming the commitment to deliver more environmentally friendly and family sized homes for London, the Labour group on the London Assembly said the Mayor has missed the point and that the economic downturn means that now, more than ever, his strategy should be prioritising much-needed affordable rented housing.

Nicky Gavron said: "The government have given Boris billions to boost London's housing market - it is crucial he gets this right. The impact of the credit crunch on every aspect of the housing sector cannot be underestimated - yet the demand for housing, particularly affordable rented housing - has never been higher.

"Over a third of a million Londoners are waiting for social housing yet the Mayor's housing adviser has made it clear they will not impose any target for rented homes on London councils.

"Without political leadership and direction from the Mayor, the record of many London councils in office shows that they will simply fail to deliver affordable housing for their residents.

"Barnet has almost 18,000 people waiting for an affordable home to rent, yet last year delivered just 10 units. Wandsworth has almost 9,000 people waiting yet delivered just 20 new homes.

"This is their record and it is just pitiful. If anything the Mayor is giving boroughs like Barnet and Wandsworth even less incentive to deliver.

"Of course we should be helping people get on the housing ladder and encourage low-income ownership schemes, but the stark fact is there are over 9,000 low-cost homes lying unsold and empty - the bulk of which are in London.

"Until the housing market stabilises and there are mortgages available, these homes will stay empty and unsold. At the same time, Londoners are crying out for low-cost homes for rent.

"The Mayor is kicking away the first rung of the ladder for the thousands of Londoners on housing waiting lists. These lists are only going to increase in the next few years."

London Councils welcomed the Mayor of London’s housing strategy, in particular praising the commitment to deliver more family-sized and environmentally friendly homes for the capital.

However, it also warned that the strategy may not be robust enough to fully rise to the challenges posed by the credit crunch in London.

London Councils’ Executive Member for Housing Councillor Jamie Carswell said: “There are many things to applaud in this strategy – especially the emphasis on larger and greener homes and the commitment to work closely with the boroughs to increase supply.

“The desire to explore new ways of delivering more homes is also welcome. Various local authorities, particularly Barking and Dagenham, have been leading the way in this area, and we look forward to discussing this with the Mayor.

“However, London Councils see this very much as a working document, as the housing landscape will change rapidly as the fallout from the economic situation increases – and when the government publishes its housing green paper in spring.

“To get ahead of the game, the Mayor must explore how to make the private rented sector work better for Londoners. If we can make this sector more attractive to our residents we can reduce pressure on the rest of the capital’s housing stock.

“London Councils also fears the Mayor’s emphasis on low cost home ownership - which should be praised for its ambition to make owner occupation more affordable - may not be viable in the current financial climate.

"With more and more Londoners at risk of repossession, what the capital needs is more affordable rented housing. I urge the Mayor to support us to deliver it.”