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Sadiq Khan's plans to deal with London’s housing crisis were savaged today by the Government.

Communities Secretary James Brokenshire has threatened to intervene if the Mayor fails to radically improve his London Plan. In a letter, he warned Mr Khan that his target to build new homes is too low.

Mr Brokenshire has also asked Government officials to investigate how more information on newbuilds could be made public, amid claims that City Hall has exaggerated the number of homes being built, an allegation Labour has rejected.

Mr Khan hit back at the letter, accusing the Government of “abject failure” on housing, slashing funding for more affordable homes in the London, while raking in billions in stamp duty from the capital.

City Hall also insisted that last year the Mayor started building more “genuinely” affordable homes at a higher rate than that achieved by Boris Johnson or Ken Livingstone.

In his hard-hitting letter, Mr Brokenshire, MP for Old Bexley & Sidcup, stressed that London faces the most severe housing pressures in the country.

He said average house prices are now more than 12 times average earnings, compared with an England-wide ratio of less than eight, and “far more than what an individual can typically expect to borrow for a mortgage”.

Mr Brokenshire added: “This is clearly unacceptable. Housing will continue to remain out of reach of millions of hard-working Londoners unless we see a step-change in housing delivery.”

He welcomed the proposed increase in London’s housing target in the Mayor’s draft plan from 42,000 to 65,000 a year. But he said it was just a “helpful first step” and accused Mr Khan of failing to recognise the scale of the challenge. “I am not convinced your assessment of need reflects the full extent of housing need in London to tackle affordability problems,” he said.

Government officials believe the target should be as high as 100,000 a year. The figure cited in revised planning policy guidelines is 72,000.

Mr Brokenshire urged Mr Khan to get on with housing schemes but stressed he should review the London Plan, taking on board the planning changes, “at the earliest opportunity”.

“I remind you that if this is not forthcoming, I have powers to direct the review to ensure London delivers the plan and homes that communities need,” he warned.

City Hall accused the Government of giving London an affordable housing grant of £700 million a year, compared with £1.75 billion in 2009/2010.

A spokesman for the Mayor said: “Rather than criticising the Mayor’s ambitious plan and plucking numbers out of thin air, ministers should meet with him to discuss the powers and investment London urgently needs.

“With Sadiq as Mayor, City Hall started building more genuinely affordable homes — including more social homes — last year than in any since devolution, smashing the record under previous mayors.”

The fall in house prices in London picked up during April to June to the fastest pace for almost a decade.

The drop means that the average London homeowner has seen more than £9,000 wiped from the value of their property over the past year, making it worth £468,845, according to lender Nationwide.

Such a price is still beyond the dreams of many Londoners paying exorbitant rents. Tens of thousands of people are also on councils’ housing waiting lists.

Other issues raised by Mr Brokenshire include fears that the Mayor is banking on many homes being built on small sites by small or medium-sized firms. It is also claimed the London Plan lacks detail on achieving housing targets, including how City Hall will work with boroughs.

Mr Brokenshire added: “I would remind you that I have powers to intervene before the Plan is published, by giving a direction to avoid any inconsistencies with current national policy.”

City Hall insists a 100,000 target could be achieved only through loss of greenbelt and metropolitan open land, and that its plans, which include building at greater density on brownfield sites, protect the overall level of “green cover”, including green roofs, when small sites are developed.