Affordable Housing: Cost of building homes almost triples under new programme

By Sam Francis
BBC News, London

  • Published
A general view of construction cranes on the London skylineImage source, PA Media
Image caption,
The cost of building a home under the Affordable Homes Programme in London has increased from £41,551 per house to £114,285 per house

The cost of building affordable homes in London using a new round of government cash will almost triple, plans from the city's mayor reveal.

About 35,000 homes are planned by 2026, paid for by £4bn of government funding - an average of £114,000 per house.

The cost per house of the first programme, under which 116,000 homes were to be constructed, was £41,551.

The Greater London Authority (GLA) Conservative group has accused the mayor of "failing Londoners".

A spokesman for the mayor's office said Brexit and the cladding crisis had contributed to an increase in costs.

The majority of the new properties "will be the social rented homes London most desperately needs", which "require a higher level of grant funding," the spokesman continued.

The first programme, for which £4.8bn of funding was obtained, covers the period 2016-2023 and the second overlapping programme the years 2021-26.

In total, 151,000 homes will be built, 69,000 of which have already been completed or are under construction.

London homes built under the Affordable Homes Programme. .  Figures from 2021 onwards are based on Greater London Authority forecasts.

The mayor's spokesman added: "Over the last five years, the mayor has hit every one of his annual delivery targets agreed with the government.

"While the funding from central government for affordable housebuilding in London remains woefully inadequate, the mayor is confident in hitting his target of starting 82,000 new genuinely affordable homes between 2021-26."

The £8.8bn secured from the government to build affordable homes in London since 2016 is just over 37% of the total funds handed out around the UK under the two programmes.

The term "affordable housing" includes social rented, affordable rented, and intermediate properties.

Media caption,

What is social housing and why do we have it?

London's housing targets and funding are agreed with ministers at the start of every new programme.

The mayor's office said there had been "significant" increase in the price of building homes, with currency devaluation, availability of materials and shortages of skilled construction labour all contributory factors, along with Brexit and need to replace cladding on properties following the Grenfell fire.

In 2020, work began on building 17,256 new affordable homes, supported by funding from the mayor - the highest number ever recorded by the GLA.

City Hall estimates London requires £4.9bn a year for 10 years to deliver all the affordable homes required.

Image source, PA Media
Image caption,
The Conservatives accuse Sadiq Khan of "failing Londoners"

Andrew Boff, the GLA Conservative Housing Spokesman, commented: "Sadiq Khan's decision to slow down City Hall house-building is scandalous.

"London has a fantastic deal from the government. The mayor is failing Londoners by squandering this golden opportunity to deliver the homes our city desperately needs."

Conservative mayoral candidate Shaun Bailey said: "London has a housing crisis. And just when we need to increase the number of affordable homes in the capital, Khan is reducing them.

"It's a shocking indictment on his abysmal house-building record."

Sian Berry, who sits on the GLA's housing committee as a Green Party assembly member, said "progress has been too slow" on affordable housing.

Ms Berry, who is the Green Party candidate for Mayor of London, said: "Why do that in a housing crisis?

"Greens have been pushing this mayor to go further on genuinely affordable housing."

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