London (Parliament Politics Magazine) – Labour ministers encounter warnings that their housebuilding project for London risks costing an astronomical £54 billion just for affordable homes unless housing associations can attract more private investment.
The G15 group, which represents major not-for-profit housing associations, accused “years of policy chaos, rising expenses and the need to also elevate existing homes” for its members struggling to build new homes.
The Government’s building project over the next five years predicts 400,000 new homes in London, which the G15 states would each cost an assessed £450,000 on average. The group, whose members house one in 10 Londoners, stated that at least 120,000 of those properties must be social and inexpensive homes to meet targets drafted by City Hall, bringing the cost to £54 billion.
Deputy Prime Minister Angela Rayner, the secretary of state for housing, refused to reaffirm the number of new social housing properties that would be built over the next five years, telling the BBC that there were “so many moving parts.”
What reforms does the g15 group demand?
G15 head Fiona Fletcher-Smith, who was due to talk at Labour’s annual conference in Liverpool later, advised the Government to release shackles on the affordable sector.
“We have the capacity to unlock billions in private finance, but we need the government to act now,” she expressed. “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.”
In a new report, the G15 stated the capital’s five-year Affordable Homes Programme (AHP) already meets a £22.2bn funding gap, and that its members have been pushed to scale back their housing starts by 76% in 2023/24, compared to last year. It expressed housing associations have shown the possibility of private-sector partnerships at projects such as Peabody’s Thamesmead, The Hyde Group’s Charlton Riverside, and L&Q’s Barking Riverside, where up to £6 of private investment was secured for every £1 of government funding.
It demanded reforms including giving housing associations access to a post-Grenfell safety fund for critical renovations, which is currently limited to private developers. They also want the Government to let them set rents over multiple years, not just for the next 12 months, to provide them more financial stability and borrowing capacity in capital markets. “Without these changes, housing associations will labour to meet the demand for social and affordable homes while also keeping safety standards in their existing stock,” stated the G15.