Mayor of London invites bids for £100 million affordable homes fund

Published by Jon Land for 24dash.com in Housing and also in Central Government, Local Government

The Mayor of London Boris Johnson today launched a £100 million fund as part of a new housing deal designed to help thousands of working Londoners.

Under the Mayor’s 'Housing Covenant’, the first part of which is being set out today, those who "contribute to the success of the capital" should expect a reasonable housing offer in return.

Bids are being invited for organisations to deliver proposals for a range of housing projects across London - including helping people to own a share in a new home - which could house up to 10,000 people.

According to the Mayor, the £100 million investment - made through the ‘First Steps’ programme - has the potential to boost the London economy by £2 billion, spurred by around £1 billion worth of construction.

Using his new powers, which include responsibility for budgets and public land, the plans aim to:

• Assist Londoners by removing red tape, including planning restrictions, to provide greater choice and flexibility and boost the mid-market offer in the capital. The aim is to make the ‘intermediate’ market, which offers a range of low-cost home ownership products, give people the same freedoms and flexibility as those buying on the open market enjoy.
• Enable people to find the home they want and then choose from a flexible range of options including shared-ownership, equity loans and a new option - ‘Rent to Save’ - which will help households save for a deposit while benefitting from low rents. This will be alongside new funding for the already popular ‘FirstBuy’ scheme. At present Londoners are hampered by a system that offers only a single　take it or leave it financial offer tied to a particular home.
• Make it easier to move the equity built up in one ‘intermediate’ home into another, remove constraints on re-sales of these properties, reduce restrictions on which Londoners are eligible for assistance and remove duplications and bureaucracy in the way these homes are marketed.

Mayor of London Boris Johnson, said: "London’s success is built by its workforce and if we are to maintain our vitality as a city we have to provide Londoners with a fairer housing deal. For an increasing number of Londoners the capital’s current housing market is just not working and failure to deal with the issue could lead to a damaging exodus that will hamper our competitiveness.

"So, in the long tradition of the great house building programmes of the past and of London's great philanthropists such as George Peabody, I want to make a new housing covenant with Londoners, one that recognises that those who contribute to our success should benefit from it too.

"To improve the housing choices of those who work to make this city the fantastic place that it is, I am opening up the market, cutting red-tape and injecting £100m worth of investment to stimulate supply. The programme we are announcing will not just unlock the door to home ownership for thousands more Londoners, it will give a welcome shot in the arm for jobs in the capital’s construction industry and spur wider economic growth too."

The Mayor has vowed that all "reusable investment" from this funding boost will be reinvested for further affordable homes delivery over the next decade.

The homes provided will be in a range of locations, offering affordable and sustainable home ownership to working London households on a range of incomes up to a maximum joint income of £64,300 per annum but with flexibility up to £77,200 per annum for families with dependents purchasing properties with three or more bedrooms. The first homes are expected to be available for sale in Spring 2013 with completions ranging up until March 2016.

The Mayor is seeking proposals from any providers that can develop intermediate housing in London. In particular, organisations not currently working with the GLA or who have not received GLA funding in the past are encouraged to bid. Organisations could include London Boroughs, housing associations, developers and house-builders, for profit and not-for-profit bodies such as charities.

All bids must be returned to the GLA by noon on 30 November 2012.