The Mayor of London, Sadiq Khan, has today set out new planning rules to speed up the building of more affordable housing, alongside plans for how record-breaking investment of £3.15bn will support 90,000 new affordable homes in the capital.

The Mayor’s new funding programme details how he will use the investment - the biggest housing deal ever secured by City Hall - to support new affordable housing in the capital over the next five years.

It is launched on the same day as new planning guidance, designed speed up development and boost affordable housing numbers.

Previous national rules on affordable housing investment were rigid, including no investment at all for mainstream low-cost rented housing. Following negotiations with government, new rules mean investment in London can now be spent on a mix of homes for low-cost rent and affordable homeownership – allowing the Mayor to meet the needs of more Londoners.

Sadiq has been clear there is not a ‘one size fits all’ approach to affordable housing in London, as the city needs a balanced mix of homes to rent and buy.

The 90,000 affordable homes will be a mix of low-cost rent, shared ownership and London Living Rent, which is based on a third of average household incomes in each borough.

Most homes in the Mayor's programme will be delivered by housing associations, with the condition that their plans must include a minimum 50 per cent affordable housing, with some partners enabled to deliver at least 60 per cent.

The Mayor is also today launching new planning guidance, setting out for the first time an innovative approach both to speeding up decisions in the planning system and increasing the levels of affordable housing.

Sadiq's Supplementary Planning Guidance (SPG) is the first step to raising affordable housing levels from the low level of 13 per cent given permission that he inherited from the previous Mayor. The guidance has been developed since the Mayor took office in May through extensive discussions with councils and the housing industry.

The SPG seeks to:

set out a clear, consistent, and transparent approach to 'viability', the process through which a development's affordable housing contribution is assessed;

offer developers a new quicker route through the planning process, removing the requirement for protracted viability negotiations if they meet a minimum 35 per cent affordable housing;

support new 'Build to Rent' developments, where institutions like pension funds invest in blocks of long-term private and affordable flats to rent.

The Mayor of London, Sadiq Khan, said: “London is in the midst of a housing crisis, with thousands of Londoners priced out of a city they call home.

“I have been clear that fixing the housing crisis will be a marathon and not a sprint, but I am determined to lead from the front and get on with building genuinely affordable homes for Londoners to rent and buy.

“These announcements today demonstrate real progress on the long road towards fixing London’s housing crisis.

“The record-breaking investment I have agreed with government means we can start building a range of different affordable homes to suit Londoners’ needs. Together with my new planning guidance, we can begin to boost the number of homes built in London and move towards a long-term strategic goal of half of all new homes being genuinely affordable.”

Planning guidance, subject to a three-month consultation period, is just one in a range of measures the Mayor is using to deliver affordable housing in London. Together with his record funding package, announced in last week’s Autumn Statement, Sadiq has been clear that he expects public land to deliver as much affordable housing as possible and is leading by example with sites owned by Transport for London.

He has already brought forward sites at Kidbrooke - delivering 400 homes of which half will be affordable – and land at Landmark Court in Southwark and Fenwick South, near Clapham North station, both of which have the capacity to deliver new affordable homes alongside commercial and retail space.

John Dickie, director of policy and strategy at London First, said: “It’s hugely encouraging to see the Mayor’s continued focus on building the homes London’s workers and families so urgently need. Giving greater clarity and guidance to housebuilders is a welcome step as we work towards a dramatic increase in housing and start building the 50,000 new homes London needs each year.”

Ian Fletcher, Director of Policy at the British Property Federation, said: “The GLA has led the field in seeking to have a planning policy on Build-to-Rent and this latest guidance is immensely helpful to the sector and the Boroughs with which it works. When you are trying to do something new in housing inevitably you need to develop understanding, and the Mayor, his Deputy and team have wanted to be at the forefront, working with planners and investors to cast a sensible planning policy.

“What you want as a developer or investor, such as a pension fund, is clarity and understanding that rental homes are different to those for-sale, which this guidance delivers. The sector wants to deliver tens of thousands of quality rental homes for Londoners, and those at discounted market rent, in a tenure blind manner. Recognising the sector and how it works in this guidance is a big help.”

Greystar’s Managing Director, Mark Allnutt, said: “We welcome the news that London is receiving a £3.15bn allocation for affordable housing, and that the rules have been relaxed to allow this to be used across a wider range of housing types for rent as well as sale.

“London not only needs more rental accommodation, but more of this needs to be designed, built and managed for that purpose. Greystar rental communities offer first class apartments and amenities to suit people at different stages in their lives across a wide range of rent levels.”

David Montague, Chair of the G15 – representing London’s largest housing associations - said: “The Mayor has secured the very best deal for Londoners. He has listened to housing associations and given us the flexibility we asked for. Now we must get on with the job of building the homes that London needs.”

Geeta Nanda, CEO of Thames Valley Housing Association, said: “The settlement for London is a great success and allows us the flexibility to build a range of homes for the very many people who are looking to us to deliver the housing solution. Not only is this important for those with dire housing needs but also for the economy. London needs its workers to be well housed for the economy to grow. At TVHA we look forward to working with the GLA to help plug the gap.”

Killian Hurley, Chief Executive at Mount Anvil, said: “Mount Anvil are incredibly pleased with the Government’s plans to boost the number of new homes through the injection of £1.4bn into affordable housing schemes, alongside a further £2.3bn Housing Infrastructure Fund.

“This country faces a housing shortage – across every tenure with too few homes being built to meet the housing needs of the nation. This commitment of funds will help the industry deliver homes that London so desperately needs. At Mount Anvil, we understand that the industry has to build better homes as well as more homes, and look forward to working alongside our housing association partners to deliver these.”

Links to both documents can be found here: https://www.london.gov.uk/what-we-do/housing-and-land/homes-londoners.