The UK government has since announced a new national housing loan scheme worth £2.5 billion. London will get just over half of the overall £1.5 billion of this funding. This funding aims to address the acute lack of affordable housing within the capital. During the last 10 years, new house-building has plummeted by 88%. City Hall would control the money and invest it through a new Developer Investment Fund. This fund is intended to jumpstart stalled or difficult-to-develop housing projects.
The Mayor of London, Sir Sadiq Khan, emphasized how important this funding was. He confirmed that it’ll provide low-interest loans direct to housing associations, at the remarkable rate of 0.1% over 25 years. This interest rate is much lower than prevailing market rates, making it a very appealing option for developers. London’s housing projects now have a combined investment of £1.82 billion. This figure takes into account an additional £322 million of grant funding.
Bidding for funding under the government’s broader housing program is set to open next month, allowing developers to apply for financial assistance to kickstart new projects. Sir Sadiq Khan expressed optimism about the impact of these loans, stating that they would “provide a kickstart for affordable housing delivery in London.” He acknowledged that many good affordable housing developments need extra help to get started.
Despite the optimistic view, blows have been struck against the mayor for his lackluster administration of his housing policy. Lord Bailey, the City Hall Conservatives’ housing spokesman, argued that the current situation stems from poor judgment and constant market interference by the mayor. He stated that Londoners are being “asked to foot the bill through their taxes to clean up a crisis they did not create,” placing the blame on the shortcomings of the city’s housing strategy.
“We are in this position because the mayor’s housing policies have fallen woefully short of Londoners’ needs. These loans are just a rescue package for developments which he has made unviable by his constant interference in the market and poor judgment.” – Lord Bailey
The government aims to deliver approximately 300,000 social and affordable homes across England over the next ten years through its £39 billion Social and Affordable Homes Programme. The recent Forward Funding allocation is a significant step in the right direction towards that end. It will help get thousands of homes needed by London built in all corners of the capital.
