Housing associations will need £54bn to deliver social housing targets in the London Plan, G15 says

The G15 has said housing associations will need £54bn to deliver the number of social homes outlined in the London Plan over the next five years.

The group, which consists of London’s largest housing associations, has drawn on figures from the Greater London Authority and Savills to estimate an affordable home in London costs £450,000 to build. 

Housing associations therefore need to secure £54bn to deliver 120,000 social homes by 2027/28.

The G15 also published a report today, ‘Increasing London’s Affordable Homes,’ urging the government to provide financial certainty for housing associations through a 10-year index-linked rent settlement, allowing them to secure the private financing needed to deliver affordable homes over this parliament.

>> See also: How do we attract more private investment into affordable housing?

>> See also: G15 stresses sector’s ‘desperate need for certainty’ and calls for 10-year rent settlement

It has also called on the government to address “the unfair disparities” in rent levels between new and existing tenants through rent convergence and give housing associations access to the underused Building Safety Fund.

The research highlights that, due to financial challenges in the sector, G15 members saw a 78% decrease in housing starts in London, dropping from 10,255 in 2022/23 to just 2,222 last year.

Including all tenures and areas outside of London, G15 landlords have cut their development pipelines from 14,658 starts in 2022/23 to 6,387 in the last financial year, which marks a 56% decrease. Grant rates contribute 12% to scheme costs today, compared to about 75% in the 1990s.

The G15 has also called on the government to work with the London mayor and set up development corporations to build on strategically defined areas of green or grey belt land, compensating for any loss of nature.

 Housing associations and local authorities need to match the government’s funding settlement six times over to build enough homes in the capital

G15 report ’Increasing London’s affordbale homes’

In addition, the body has said that the government should create an Affordable Housing Commission, to scrutinise housebuilding targets and hold the government accountable for delivering them.

The chair of the G15 and chief executive of L&Q, Fiona Fletcher-Smith said: “The need for new homes in London is clear, but it’s essential that the government doesn’t lose sight of the importance of social and affordable housing in this plan”.

Fletcher-Smith added: “We’ve seen a decline in the number of new social homes in recent years, and this trend must be reversed.

“Housing associations are ready to step up, but we need government support to unlock the private finance that will make Labour’s target a reality.”

She added: “Housing associations are not-for-profit entities, which means every penny we generate goes back into building and maintaining homes”.

“We have the capacity to unlock billions in private finance, but we need the government to act now. With the right support, we can play a key role in meeting Labour’s housing goals and ensure that London’s future is more affordable and secure for all its residents.”