Mayor Sadiq Khan announces draft Housing Strategy for London
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The mayor has pledged devolution of Stamp Duty, £250m for land acquisition and higher council tax on empty homes
In the first week of September the Mayor of London, Sadiq Khan, has made no less than five housing announcements in the run up to the publication of his draft Housing Strategy for London.
Mr Khan warned: “The housing crisis is the biggest challenge facing our city today and I’ve been honest with Londoners from the start – we won’t turn things round overnight. This is going to be a marathon, not a sprint and we need to be able to take robust action to tackle it.”
The three month consultation period on the draft London Housing Strategy will end on 7th December, and you can have your say here.
Here’s what it pledges:
New and affordable homes
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Work will commence on 90,000 genuinely affordable homes by 2021. The Mayor has secured £250m funding alongside the record £3.15b he has already negotiated for new homes at around social rent levels, London Living Rent levels and as part of Shared Ownership schemes. The £250 million will be used by City Hall to buy and prepare land for the new homes, and Mr Khan has pledged to use Compulsory Purchase powers where necessary.
Mr Khan has pledged to support new housing providers and look at self-build, modular and community-led housing delivery methods. He has also pledged to make it easier for small and medium-sized builders to pay less up front as per the Mayoral Community Infrastructure Levy.
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He said: “It is shameful that a generation of young people are being priced out of the city they grew up in because of the housing crisis. I inherited a development pipeline where just 13 per cent of homes given planning permission were affordable, which is unacceptable. I’ve been honest from the start that turning things round will take time and fixing the housing crisis will be a marathon not a sprint, but my strategy sets out how we can start making a real difference to affordable housing in the city.”
Earlier this week the Mayor rejected a development in Westminster on the site of the former New Scotland Yard that offered just 10 affordable homes, or four per cent of all units. This figure fell to just three percent when developer BL Developments increased the number of homes by 27, with no additional affordable homes. Earlier this year, the Mayor’s Supplementary Planning Guidance stated that developers offering over 35 per cent of affordable housing would be fast-tracked through planning.
London Model of renting
Average rents in the PRS in London have risen five times faster than average earnings in the last seven years according to the Mayor’s office. With one in four of London’s households living in the private rented sector (PRS), the Mayor has proposed a London Model for renting, which will bring together tenants and landlords to consult upon reforms to 30-year old legal arrangements currently dictating the PRS. The Model will aim to solve the problem of insecurity associated with short tenancies, ensure 100,000 Londoners have access to tenancy deposit loans, and allow boroughs to license landlords.
Devolved powers for London
Just seven per cent of tax paid by residents and businesses in the city is redistributed by the Mayor, equating to a reliance on central Government for 74 per cent of its funding.
The average cost of a one bedroom property in London costs more than a three bedroom home in every other region in England. Home ownership is declining, and over 90,000 children live in temporary accommodation, whilst one in 50 Londoners are homeless.
As such, the Mayor has argued that London requires greater devolved powers in order to make decisions that directly impact it. The new powers will be used to acquire more land for new homes, with profits reinvested in the city’s housing. The Mayor said that London cannot control its future “with one hand tied behind our backs.”
The debate about scrapping Stamp Duty continues to rage on, with the London Finance Commission bolstering the argument for the devolution of property taxes.
Mr Khan said: “I will use my powers and resources to their fullest extent, but Government needs to play its part too by giving London the powers and resources we need to see an even greater step-change in the number of homes being built. This launch marks the start of a three-month consultation - I want as many Londoners as possible to let me know their views on how we can improve housing in London.”
John Dickie, director of Strategy and Policy at business group, London First, agreed: “We must start building 50,000 new homes a year to keep the city working. Giving London’s Government greater control over taxes raised here will make it easier to plan, finance and fund investment, helping to unlock the housebuilding that Londoners so desperately need.”
Increased council tax on high-value empty homes
In the wake of a report by LSE, commissioned by Mr Khan, into overseas investment in the housing market and empty homes, the Mayor has proposed boosting council tax on high-value homes left empty to incentivise the owners to either live in the property or, at the very least, to provide additional funding for new homes.
The LSE and University of York’s report found that there was actually a low rate of empty homes in the capital, with more in prime locations. The Mayor said: “In the midst of a housing crisis, just one home left unoccupied is one too many.”
Leader of Westminster Council, Cllr Nickie Aiken, was in agreement. She said: “I support the Mayor’s proposal for greater flexibility to be afforded to local authorities around the amount that could be levied on empty homes. Not only is it an important message to send out, it would also generate additional funds to be invested in our areas for the benefit of local residents. Along with the Mayor I have made it my priority to ensure that we have genuinely affordable housing in the heart of the capital.”
Mr Khan has also proposed an inflation-linked rent settlement, scrapping of Housing Revenue Account borrowing caps for councils, and reform of Right to Buy rules.
A new social housing watchdog
The Mayor has called for a new independent Commissioner for Social Housing Residents to act as a watchdog for the wider socially housed community in the wake of the Grenfell tragedy. His other proposals include access to the housing ombudsman and social housing regulator.
The Mayor said: “I welcomed the Government’s decision to establish the Grenfell Public Inquiry, but I have been clear that the terms of reference are not as broad as I and many residents would have liked. It is crucial that social housing residents are able to have confidence that all the factors which led to the fire and the lacklustre response will be identified and addressed quickly and independently.
“I firmly believe residents must be at the heart of decision-making about the future of social housing. That’s why I am calling on the Prime Minister to work with me and residents to develop a package of measures that guarantee they have a much stronger voice.”
Mayor Sir Steve Bullock, London Councils’ Executive member for housing, added: “In the wake of the Grenfell disaster, the safety of London’s tenants in private, local authority and housing association homes must be the paramount concern for central and local government. A new regulatory regime must ensure that the voices of London’s tenants and leaseholders is built in to its structure and reflected in its culture.”