London planning news, July 2019

Mayor reveals funding gap of £4.9 billion/year needed to secure affordable housing delivery

The Mayor has launched a new report examining the amount of grant funding required to meet the target for new affordable homes, as set out in the draft new London Plan.

The new Plan identifies a need for 65,000 new homes each year, with the aim that 50% of these should be affordable. Modelling the changes in costs, revenues, and sales values between 2022/23 and 2031/32, City Hall analysis predicts a scenario where the gap between development costs and revenues will widen.

Accounting for these trends, the analysis identifies an average subsidy gap of around £284,000 per social rent home and £32,000 per shared ownership home over the ten-year period covered by the study. When considering the Mayor’s intention to build 325,000 affordable homes in this ten-year period, the overall shortfall is estimated to amount to £74.5 billion, almost £7.5 billion per year. When assumptions about private developers’ contributions to affordable housing delivery (equivalent to £2.3bn a year) and ‘cross subsidy’ from affordable housing providers (equivalent to £0.3bn a year) are factored in, the final estimate of the grants funding gap needed to deliver the new affordable homes programme is estimated to be £4.9bn a year.

Whilst the Mayor currently receives £70om in grant funding from central government to support the delivery of affordable homes, the report argues that a seven-fold increase in funding is needed in order to meet the new Plan’s targets.

Sadiq Khan commented:

‘This research shows that to build genuinely affordable homes at the scale required, the Government’s approach to funding needs to fundamentally change. We need to return to higher grant rates and agree a long-term settlement to give us the tools to keep tackling the housing crisis head-on.’

On 18 June, London Heathrow Airport launched a consultation seeking views on its proposed expansion, setting out how it plans to manage and mitigate the effects of its growth on communities living in the vicinity.

Responses will support the Airport’s submission of a development consent order (DCO) application, which is currently expected to be submitted to the Planning Inspectorate in 2020. If a DCO is granted, the Airport said it hopes the third runway will open in 2026.

The consultation addresses the following specific areas:

• the preferred Masterplan for expansion;
• plans to operate the future airport;
• preliminary assessment of the effects of the airport’s growth; and
• plans to manage the effects of expansion.
  
  

The accompanying documents set out a range of planned mitigation measures, which aim to tackle a number of key environmental issues including noise, air quality, and climate change, as well as the Airport’s impact on local transport networks, surrounding communities, and the historic environment.

Those wishing to respond have until the 13th September 2019 to submit their views.