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Housing: Greater London

Department for Communities and Local Government written question – answered on 26th March 2015.

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Photo of Diane Abbott Diane Abbott Labour, Hackney North and Stoke Newington

To ask the Secretary of State for Communities and Local Government, what assessment his Department has made of the effect of housing costs in London on the ability of employers to recruit staff; and if he will make a statement.

Photo of Austin Mitchell Austin Mitchell Labour, Great Grimsby

To ask the Secretary of State for Communities and Local Government, if he will take steps to create more affordable housing in London.

Photo of Brandon Lewis Brandon Lewis Minister of State (Communities and Local Government)

Decentralisation

The Coalition Government decentralised housing, regeneration and economic development to the Mayor of London from April 2012. This enables him to shape programmes and direct funding to meet London’s needs.

As part of the transfer of housing and regeneration functions we provided a capital grant of around £2.6 billion to the Greater London Authority up to 2014-15 to fund the housing and regeneration programmes inherited from the Homes and Communities Agency, the London Development Agency and for the development of the Olympic Park.

Budget measures

Our commitment to support London was set out in the recent Budget, where the Government set out the following proposals for London:

  • £1 million to allow the London Land Commission to create a comprehensive database of public sector and brownfield land.
  • £7 million to the Greater London Authority to support the development of the Croydon Growth Zone. This could unlock over 4,000 homes and 10,000 jobs.
  • £97 million of funding and a ring-fenced local 50% share of business rate growth to support the London Borough of Barnet and the Greater London Authority’s plans for the regeneration of Brent Cross. This will unlock approximately 7,500 homes of which at least 15% will be affordable.
  • Consult on giving greater powers over planning on sightlines and wharves to the Mayor of London, allowing the Mayor to accelerate provision of new homes by reducing planning delays.

Affordable housing investment

Government funding for new affordable housing in London is as follows: 2010-11: £1.1 billion (outturn), 2011-12: £712 million (outturn), 2012-13: £400 million (budget), 2013-14: £392 million (budget); 2014-15: £516 million (budget). However, this understates the total expenditure on new affordable housing in this Parliament. Across England, our affordable housing programme in 2011-15 is delivering £19.5 billion of public and private investment in affordable housing; about a quarter of which is being provided in London.

This investment continues to contribute to the provision of new affordable homes for Londoners, of which 51,300 had already been delivered in London between April 2010 and the end of September 2014.

A further £1.07 billion has been allocated from the 2015-18 Affordable Homes Programme, to deliver another 32,000 new affordable homes in London. In addition a further £180 million has been allocated from the Affordable Homes Guarantee Programme to deliver 8,700 homes. The Greater London Authority has so far announced initial grant allocations of £404 million to deliver 18,000 new homes and are now inviting further bids on a continuous market engagement basis. Again, the grant funding understates the total anticipated expenditure on affordable housing. We will deliver a total of 275,000 new affordable homes across England in 2015-20, with £38 billion of public and private investment. London’s allocation for 2018-20 has not been finalised.

Building more rented accommodation

The London Housing Bank is a new housing fund intended as a springboard to home ownership for aspirational working households on lower incomes. Through London Housing Bank, we are providing the Greater London Authority with £200 million of low-cost loan funding to deliver 3,000 – 4,000 new homes by March 2018.

The Greater London Authority has already announced the first allocations of funding from the London Housing Bank, which will help deliver intermediate rental homes. These schemes include: Peabody Homes in Thamesmead; Isis part of the wider Hale Wharf regeneration site; and Quintain part of the continued regeneration of Wembley Park.

Under our £1 billion Build to Rent fund we have contracted 4 schemes in London worth over £63 million and delivering 671 homes for private rent.

Improving social housing

We have awarded Decent Homes Backlog Funding of £821 million to 14 London Boroughs. This funding has so far made 42,110 homes decent. Gap funding granted to stock transfer landlords of £24 million has helped ensure that less than 0.9% of their stock failed the Decent Homes Standard at the end of March 2014.

A further £145 million has been awarded to 9 London Boroughs to tackle their remaining Decent Homes Backlog. This will help to ensure that no more than 10% of stock in each local authority is non-decent by April 2016.

We have also taken steps to protect leaseholders from excessive works charges imposed by local authorities.

Reducing empty housing

We have provided the Greater London Authority with £29 million to bring 1,600 empty homes back into use as affordable housing. Our full package of reforms to tackle empty housing is outlined in the written answer of 17 March 2015, Question 227326.

London Boroughs have been allocated a total of £720 million of New Homes Bonus funding for 2011-2016, recognising over 140,000 additions to stock, and over 15,000 long-term empty properties returned to use. Almost 50,000 of these also received the premium for affordable homes.

Supporting self-build and custom build

In July 2012 we launched the Custom Build Homes Loan Fund and we delegated £5 million to the Greater London Authority to administer schemes in London. Bids exceeding this were submitted to the Greater London Authority and £4.8 million was allocated. We have exempted self-builders from Community Infrastructure Levy and Section 106 tariffs.

Promoting home ownership schemes

Since the start of the Help to Buy scheme in March 2012, over 5,300 families across London have brought a home using the support of a Government loan or guarantee, of which over 4,200 sales were to first-time buyers. This includes 2,430 under the Equity Loan sales scheme (of which 2,304 were to first-time buyers), 2,175 under the Mortgage Guarantee sales (of which 1,955 to first-time buyers) and 721 Newbuy sales (data is not available for the number of first-time buyers).

We have reinvigorated the Right to Buy, with a proportion of the sales receipts being used to build new housing. This increases housing supply, moves people up the housing ladder and gets people off waiting lists.

Supporting locally-led regeneration schemes

We, with the Mayor, are investing each investing £200 million to create 20 new Housing Zones which will deliver 50,000 homes in London. The Mayor announced the first eleven Housing Zones in London in February 2015.

We are working with the Greater London Authority and Transport for London to unlock 11,000 homes at Barking Riverside.

We have invested around £125 million through Get Britain Building for twenty two schemes which has resulted in starts for 3,000 homes. The schemes include:

Brentford Locks West – Get Britain Building funding enabled the first phase of this mixed use scheme by Isis Waterside Development to be delivered, bringing forward the first three blocks which deliver a total of 150 homes.

Grahame Park, Brent – Get Britain Building funding unlocked a phase of this major regeneration scheme that had stalled. The first block of homes was completed in March 2014 with the final homes due to complete in March 2015.

Lewisham Gateway - Get Britain Building funding will deliver 193 units and indirectly support the delivery of an additional 701 homes.

We have shortlisted four housing estates in London for a share of a £150 million Government loan fund for Estate Regeneration. These schemes are in Grahame Park, in Barnet; Blackwall Reach and New Union Wharf, in Tower Hamlets and Aylesbury Estate, in Southwark. They would provide more than 8,000 new homes, of which more than 3,000 would be additional homes

The Government announced in 2012 a UK Guarantee which would allow the Mayor of London to borrow £1 billion at a new preferential rate from the Public Works Loan Board to support the Northern Line Extension. We have aslo recently made regulations allowing the retention of 100% of business rates growth in the area from which to fund the borrowing. The extension is critical to the realisation of the £8 billion Battersea Power Station redevelopment, as well as the wider regeneration of the Vauxhall and Nine Elms area.

Surplus Public Sector Land capable of delivering almost 28,000 homes has been sold in London. This was critical towards helping us achieve our wider ambition to dispose of land for 100,000 homes across England by the end of March 2015.

We have supported a number of other regeneration projects in London. These include:

  • £141 million capital grant to the Greater London Authority for Olympicopolis – this project aims to develop a new education and cultural quarter on the Olympic Park.
  • £10 million capital funding for the London Enterprise Fund to support the regeneration of Croydon and Tottenham (2011-12).
  • Royal Albert Docks Enterprise Zone - we awarded a grant of £12 million from the ‘Building Foundations for Growth’ fund which is designed to accelerate progress on the zones to maximise long-term job creation. This supports the Mayor’s priority for growth in East London and building on past 30 years of regeneration in the wider area. Regeneration of the Royals will support the convergence of East London with the wider city area.

Tackling homelessness and rough sleeping

We have supported the Mayor in tackling homelessness in London through:

  • £34 million grant to tackle rough sleeping across London;
  • Developing a pioneering £5 million Social Impact Bond to improve the outcomes for a large group of persistent rough sleepers in London;
  • Providing £3.8 million from the Homelessness Transition Fund for the No Second Night Out scheme to help new rough sleepers off the street quickly in London; and
  • Allocating £2.8 million of Single Homelessness funding in 2011/12 to take forward a package of measures to prevent and tackle single homelessness, including rough sleeping.

In addition we have provided £167 million Homelessness Prevention Grant to local authorities in London to tackle homelessness and rough sleeping.

There is more to do, but I hope this illustrates the decision action taken by this Government to build more affordable homes and help people move on and up the housing ladder.

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