Sadiq Khan hands £200m cash bonanza to capital's housing associations

The mayor of London is handing £200m to housing associations in the capital to help them speed up the construction of homes which have started to be built this year.

Khan said uncertainty around Brexit had hit house sales, falling sales and uncertainty over house prices.

“This is having a knock-on effect on housing associations, who currently receive low levels of funding from government and rely heavily on income from selling new market-price homes to help subsidise new affordable homes.”

The grant funding would enable housing associations to switch homes from market sale or shared ownership to homes for rent at social or intermediate rent levels which are lower than market rent, he added.

The mayor said the government’s “chaotic mishandling of Brexit” was undermining his administration’s goal of seeing more homes built and he also called on central government to match his £200m cash pot.

“Whatever happens with Brexit, ministers must at the very least match my support and ensure we can keep building the homes Londoners need over the coming years,” he added.

The mayor’s office said the support offered to individual housing associations would depend on the schemes in their pipeline and those where construction had already started.

“Given the strains already on the mayor’s affordable housing delivery budget, and the importance of targeting it effectively, this funding is only available for homes starting in this calendar year,” it added.

At the end of February Khan, Paul Hackett, chair of the ‘G15’ largest housing associations in London, and councillor Darren Rodwell, executive member for housing and planning at London Councils, wrote an open letter to the Secretary of State for Housing James Brokenshire warning of the risks to the capital’s housebuilding ambitions in the event of a no-deal Brexit, or an exit which put the city at an economic disadvantage.

Speaking about the mayor’s £200m handout Helen Evans, chief executive of Network Homes and vice-chair of G15, the group of leading housing associations, said: “The current market uncertainty limits our ability to generate cross-subsidy to reinvest in affordable homes, so this strong, positive action to address that is welcome.

“If enough additional funding is made available we will be able to continue to commit to new developments and increase the levels of affordable homes we are building. We look forward to engaging with the GLA to secure this.”