The number of City Hall-funded affordable homes started in London last year was well down on 2022/23, though significantly more of them will be available at the cheapest social rent levels than in previous years, according to new figures published today by the London Assembly.
The Assembly housing committee’s annual affordable housing monitoring report tracks the Mayor of London’s major government-funded housebuilding progress, including with the £4.8 billion 2016 to 2023 and overlapping £4 billion 2021 to2026 programmes, which are between them expected to help deliver some 140,000 new homes.
The report highlights a major change in the strings attached to the funding by Whitehall between the two programmes. The 2016 funding deal restricted the number of social rent homes it would fund to just 39 per cent of the total, while the 2021 settlement saw Sadiq Khan win a 60 per cent social rent quota.
He is well on track to achieve that goal, with social rent homes making up 88 per cent of starts in 2023/24. City Hall’s target for new council homes of 20,000 starts by March 2024, was met too, with the 2022/23 total the highest for council housebuilding since the 1970s, although the Mayor’s manifesto commitment of 40,000 more council homes by 2030 was “not currently specific” enough to assess its progress, the report says.
And affordable homes delivery has stuttered over the past 12 months, as it has for housebuilding overall, with the number for new homes of all types built, including those priced at full market levels as well as the “affordable” types, dropping from just over 21,000 in 2022/23 to 14,270 – down by a third.
For affordable homes in particular, the reduction is even more dramatic. In 2022/23 more than 25,000 homes were started, as Khan rushed to meet his target of 116,000 “starts” under the 2016 programme. Last year, only 2,358 homes were started under City Hall-funded schemes, including just 1,777 under the new 2021 deal. Overall that leaves some 75,000 homes to be completed by 2030.
The current programme has been especially hit by the same economic headwinds affecting housebuilding in general, according to the report. It sets out a now familiar combination of high interest rates, inflation, the complexities of developing many “brownfield” sites, skills shortages and the costs of implementing new regulations, including safety provisions.
For social landlords – mainly borough councils and housing associations – the picture is compounded by government-imposed caps on social rent levels and borrowing, which have the effect of reducing their income, the report says. It adds, echoing recent warnings from the cross-party London Councils, that this is occurring as the cost of maintaining and upgrading existing homes continued to rise.
Those factors had already seen the targets for the 2021 to 2026 Affordable Homes Programme revised down from 35,000 homes to between 23,900 and 27,100, the report notes, with that reduction also recognising the increased proportion of social rent homes being supplied. These require more funding per home than other tenures.
The revisions were made under the Conservative government, but the report also highlights two additional agreements already made between Khan and its successor, underlining improved relationships between City Hall and Whitehall. These extend the deadline to complete the 2021 programme to 2030, and enable extra funding for “genuinely affordable” intermediate tenures such as Khan’s London Living Rent.
In addition to government-funded properties, the report covers affordable housing secured through Section 106 agreements, whereby developers include an agreed number of affordable homes within new residential schemes, which are negotiated through the planning process.
Khan’s “fast track” planning application routes for developments offering at least 35 per cent affordable housing had boosted numbers on new build schemes from 19 per cent in 2016/17 to 39 per cent in 2022/23, the report says. But the housing associations which conventionally take on those homes have become increasingly reluctant to do so because of their own money worries, threatening future achievement, it adds.
The report also details affordable housebuilding by borough, showing Greenwich, Redbridge, Tower Hamlets and Lewisham between them accounting for almost half the affordable home starts in 2023/24, though it suggests that comparing multi-year programmes on one year’s figures can be misleading.
It ends on a familiarly grim note, despite noting City Hall’s optimism that current targets will be met. London’s “acute” affordable housing need “continues to exceed” the numbers delivered, it says. In fact, at 8,570, the net number of affordable homes completed in 2022/23 is less than a quarter of the amount City Hall estimates is needed every year.
The report will be discussed at the Assembly’s housing committee this afternoon, when Khan’s deputy for housing, Tom Copley will be quizzed by Assembly members. The meeting can be viewed live or later via webcast or YouTube.
OnLondon.co.uk provides unique coverage of the capital’s politics, development and culture. Support it for just £5 a month or £50 a year and get things for your money too. Details HERE. Follow Charles Wright on X/Twitter. Photo from GLA.