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What's Sadiq Khan done for the London property market?

Posted on 2017-03-16

He’s now been in the hotseat at City Hall for around nine months, but has Sadiq Khan come good on any of the housing pledges and promises he made during his campaign to be London Mayor?

Khan, like his main rivals for the post, made a big deal of housing before the vote in early May, when the Tooting-born son of a bus driver comfortably beat his closest competitor, Conservative candidate Zac Goldsmith.

He’s had a busy first few months in office – finally implementing the long-awaited Night Tube, dealing with industrial disputes and pollution issues, batting off questions about the controversial Garden Bridge and launching the new ‘Hopper’ fare, which allows customers to make two journeys for the price of one within an hour.

What about housing and property, though? After all, Khan called the mayoral election a ‘referendum on housing’ and made a number of bold pledges in the lead-up to the vote.

This included plans to build 80,000 new homes a year, a proposed crackdown on the Buy to Leave phenomenon and a not-for-profit letting agency for the whole of London. Of course, Khan hasn’t been in situ long enough to push through all his goals, but we take a closer look at what he has achieved so far.

Homes for Londoners

As promised, Khan has set up a ‘Homes for Londoners’ team at City Hall, with the Mayor himself making a conscious effort to personally oversee the attempts to increase the rate of housebuilding in the capital. To make this possible, he has set up a board – which he chairs – of housing and industry experts from the Greater London Authority (GLA), Transport for London, various London councils, the capital’s biggest housing associations and representatives of London’s property sector.

The board, which meets every quarter, has oversight over a number of key areas, namely: overall housing delivery across London, the statutory London Housing Strategy, planning and infrastructure coordination, delivering housing investment programmes and a task-and-finish work programme for policy development and innovation.

In addition, a Housing Investment and Policy Panel, led by Deputy Mayor for Housing and Residential Development, James Murray, meet on a monthly basis “to monitor housing performance and steer the work of Homes for Londoners”.

Affordable homes

In November’s Autumn Statement, the chancellor Philip Hammond announced that more than £3 billion would be handed from the Treasury to City Hall to help build at least 90,000 new and affordable homes in London across the next six years.

As part of the Mayor’s Affordable Homes Programme 2016-21 funding guidance, which was also released in November 2016, plans were set out on how the government money will be spent, with aid given to Londoners who would otherwise struggle to rent or buy.

Khan is offering three main types of affordable homes: London Affordable Rent (for people on low incomes), London Shared Ownership (for people with ambitions to buy who can’t afford a home on the open market) and London Living Rent (which helps Londoners on average incomes to save for a deposit by charging below-market rents).

On a long-term basis, it’s Khan’s ambition to make half of all new homes in London affordable. Of course, this regularly brings about questions of what exactly constitutes affordable, particularly in London, but the Mayor has consistently promised “genuinely affordable homes for Londoners to rent and buy”.

It was a central tenet of his campaign and Khan seems determined to drastically improve on recent figures. According to GLA stats, just 13% of new homes approved in London in 2014/15 could be counted as affordable, while only 63,637 affordable homes were started in London between 2009/10 and 2014/15.

Streamlining development

In order to make his plans for 50% of all new homes in London to be genuinely affordable an achievable goal, Khan has also sought to obtain more affordable homes from the private sector. To make this feasible, City Hall has offered to streamline approvals for developments that meet affordability criteria. Planned projects and developments which incorporate 35% or more affordable housing without public subsidies will encounter less rigorous checks, with Khan keen to encourage developers to build cheaper homes in London rather than another glut of luxury apartments or penthouses.

Khan has also talked plenty about making use of public land owned by City Hall for housing, in particular land owned by Transport for London. Where possible, he wants to identify surplus public land for affordable housing, as well as fast-tracking development on TfL sites that currently lay dormant and unbuilt on.

What can we take from this?

Khan has certainly lived up to his promise to push the affordable housing agenda, but the success (or otherwise) of his attempts to get half of all new homes to be genuinely affordable will only become clearer over time. The creation of the Homes for Londoners team at City Hall is a positive sign – and a sign that Khan is taking housing seriously – while the attempts to streamline developments and build homes on surplus public land also seems sensible.

Less has so far been heard about his not-for-profit letting agency or his plans for London’s private rented sector, and there has so far been no decisive action on Buy to Leave or empty homes, but the fact the Mayor has been in the job for less than a year makes this understandable.

The new London Plan, which is currently being developed and will see a consultation draft published this August, will give us more of an idea about the Mayor’s long-term plans and ambitions.

Overall, so far, so good for Sadiq Khan. But the long-term success of his housing strategy will be impossible to judge for a few years yet.

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