London mayor loans £45 million to new shared ownership investors

As part of the mayor's first steps challenge fund, Johnson has allocated a total of £45m to two separate investments. A further £120m will be raised from long-term private sector investment. According to the mayor's statement, "the fund is aimed at attracting investment from institutions such as pensions funds and insurance companies". The programme has already helped 52,000 people purchase a shared ownership home in London.  

The first development will be delivered in partnership with Horizon Infrastructure and Barking and Dagenham Council. The Greater London Authority (GLA) will allocate £22.5m to this development and further funding will be received by pensions funds and institutional investors. The loan will be repaid within 15 years with interest. The project will see the delivery of 500 new shared ownerships homes before 2020.

The second development will be delivered with Chaco Ltd, "an organisation that provides institutional non-bank funding for housing associations and registered providers". The GLA will contribute £22.5m towards this development and it is hoped that this will encourage further investment from investors such as Aviva, CBRE and M&G Investments.  This project will deliver 500 new shared ownership homes across the city.

Johnson said: “This scheme is a brilliant way to open up home ownership to Londoners on modest incomes, making the first step on the property ladder just that little bit easier… I’m very pleased that the first institutional investors have come on board through my First Steps Challenge Fund."

"This is a great vote of confidence in a housing model which is incredibly popular with consumers, and we need to see more of it in London,” said Johnson.

Planning expert Richard Ford of Pinsent Masons, the law firm behind Out-Law.com, said: "With starter homes around the corner, the impact on shared ownership is of particular interest, as well as the impact on affordable rent, intermediate and PRS. This mayoral announcement is designed to keep momentum going in the shared ownership model and stimulate pension fund and other major investment and I hope it is successful."