Mayor announces London Housing Bank investment scheme

Out-Law News | 10 Apr 2014 | 2:24 pm | 1 min. read

Developers could be granted up to £200 million in loans to help speed up the building of around 3,000 homes under proposals for a new investment scheme launched by Mayor of London Boris Johnson.

Under the proposed London Housing Bank scheme, City Hall would grant loans to developers to accelerate large scale housing schemes which have planning permission. The homes would be let at low cost rent below market rate for a ten year period before being sold on and the loan repaid.

Johnson said in a statement that City Hall research had found that planning permission has been granted to around 200,000 homes in London which have not yet been built. Around three quarters of these consents are on large, multi-stage regeneration developments where building can be slowed down by funding and sales constraints, he said.

The Mayor said that in the future the scheme could extend its offer to further incentivise building by purchasing off-plan market homes or offering funding guarantees. Future funding could be attracted from a range of sources, including the public sector and private sector institutional investors, he said.

“We’re doing everything we can to double house building across the capital and address a 30 year failure to build enough homes for this thriving city," said Johnson in a statement. "The proposed London Housing Bank is just one of several highly innovate new schemes we are pioneering here at City Hall to help meet the needs of hard working Londoners."

"Through this exciting new fund we hope to provide thousands of brand new homes many years sooner than would otherwise be possible, and make them available to rent at more affordable, below market, rates for hardworking Londoners,” Johnson said.

The consultation is open for responses until 21 May.