On Friday, Sadiq Khan was voted the new Mayor of London. But what will he do for the housing crisis?
In the last 12 months, house prices in London have soared by 13.9%, taking the average price well over £500,000. With so many prospective first time buyers struggling with the cost of housing in the capital, Khan has pledged to address the crisis.
As Mayor of London, Khan states that his single biggest priority will be to build thousands more homes every year, committing to 80,000 new homes per year. It is hoped that building more homes will create a more sustainable housing market. However, political campaigns are often full of ambitious targets that are never met, for example, in 2014/15, just 26,860 new homes were built in London.
Khan will use City Hall powers to require developers to build more socially inclusive homes. He will set up a new team dedicated to fast-tracking the delivery of genuinely affordable homes to rent and buy.
Under the new mayor, any new housing development must include 50% affordable housing. In an interview with The Guardian, Khan explained what affordable means: “A combination of either social rents – and social rents are linked to manual workers’ salaries – or homes where you pay a London living rent (a third of average local earnings) rather than market value of properties.”
The affordability test will be determined borough-by-borough – the London living rent would be higher in Hackney than Barking and Dagenham, for example.
The new mayor has also promised to give priority to Londoners on new homes. This policy was designed to redress the balance in the housing market, as many properties in the capital are marketed overseas before being offered to locals.
To help in delivering 80,000 new homes a year, Khan plans to build on land owned by the mayor, including Transport for London land, as well as developing other public sector land, such as NHS sites.
Khan also plans to improve planning and design policies to ensure more choice for downsizers, the elderly or those in need of care – 10% of all new homes must be wheelchair accessible.
One of the main barriers to homeownership is the rising cost of private renting in London. Khan plans to form a not-for-profit letting agency to monitor landlords and end expensive fees for tenants.
The new Homes for London Living Rent will be a new type of housing for struggling renters, where rents are calculated based on one-third of the average wage in each borough. There are also plans for homes to part-buy, part-rent for first time buyers.
With around 57,000 empty homes in London, Khan plans to bring these back into use to boost supply, using compulsory purchase orders. If you have an empty home that you are planning to rent out again, Unoccupied Property Insurance will protect your investment until it is ready for use.
The Chief Executive of the HomeOwners Alliance, Paula Higgins, comments on Khan’s plans to solve the housing crisis: “Sadiq Khan’s plans to build 80,000 new homes are welcome but ambitious, especially when you consider only 26,000 new homes were built in 2014/15 in the capital. He will need to hit the ground running and put all his City Hall powers behind delivering this promise and his other plans if we are to achieve a sustainable housing market, where Londoners can afford to buy.”