Mayor Sadiq Khan has launched a consultation on plans to make housing more affordable for Londoners.
Khan has proposed rents based on 40 per cent of key workers’ average household incomes, with rent rises potentially linked to wage growth.
The proportion of a key worker’s income needed to cover rent on a median one-bedroom property in London was around 74 per cent of total income, Generation Rent found earlier this year.
These homes would be built “in addition to social rented homes and aimed at Londoners on ordinary incomes, who are unlikely to secure social housing but struggle to pay high private rents”, according to City Hall.
Khan said he was “determined to do everything in my power to make housing more affordable for Londoners… The housing crisis in our capital doesn’t just affect those on the lowest incomes, it impacts those on ordinary incomes who struggle to meet high housing costs in London”.
Affordable housing in decline
Critics of Khan’s proposed policy have pointed to Khan’s record on building affordable homes. The number of affordable homes built in London between April 2023 and March this year fell by 88 per cent.
Just over 3,100 affordable housing builds began across Greater London between April 2023 and March of this year, down from 26,386 starts in the previous 12 months, according to the Office for National Statistics (ONS).
The mayor’s 2021-26 housebuilding programme had aimed to build 35,000 new affordable homes using the government’s £4.82bn grant, but 2023’s figures account for less than ten per cent of the promised five-year total.
“These figures bear out that something is very, very wrong with housebuilding in London,” Lord Shaun Bailey, City Hall Conservatives housing spokesman, said.
“On the day that the Mayor announces consultation to build a further 6,000 affordable homes – this time for key workers – the first question on the minds of Londoners, journalists, and politicians must be whether he will build even half of that figure if the ONS data is any indication. Labour may insist that everything in London is fine, but we could not disagree with their assessment more,” Bailey added.
Kristian Niemietz, the editorial director at the Institute for Economic Affairs, also criticised Khan’s policy proposal.
“What he is proposing is not a rent control in the conventional sense: it is a new type of public housing, and for public housing, rent levels are politically determined anyway,” he said.
“While far less bad than conventional rent controls, it is not much of a solution either. London needs a massive private sector-led supply-side boost, a reenactment of the great housing boom of the 1930s – not special government housing projects for politically favoured groups.”