London affordable homes target difficult to hit, City Hall admits

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

City Hall has admitted it will be difficult for Mayor of London Sadiq Khan to build all the affordable homes he has promised.

The mayor's housing deputy said the main pledge of 116,000 homes to be started by March 2023 looks "increasingly challenging".

Tom Copley blamed inflationary pressures, rising interest rates and recent political turmoil.

Tory assembly members accused Mr Khan of "getting his excuses in early".

Mr Copley argued the path to hitting the target was "narrowing every time the government made a statement".

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To fulfil the mayor's central housing pledge would mean beginning work on a record 25,000 affordable new homes next year.

Only 18,722 homes have been started so far in 2022.

There were 10,252 affordable homes completed last year, using City Hall grants awarded to developers from the £4.8bn government funding covering the period between 2016 and 2023.

Mr Copley told the London Assembly's housing committee that councils and housing associations were finding conditions very difficult.

Inflation in the construction sector rose by more than 13% in the year to August, and the government's mini-budget has now hit the cost of borrowing.

"Interest rates are rising, making it even more expensive for our delivery partners to borrow and harder for people to access mortgage finance to buy either market sale properties to cross-subsidise our affordable housing or the shared ownership products that we offer," he said.

"All I can say is that we will be leaving no stone unturned to get them built."

Sadiq Khan set out his London Plan for how the capital should be developed during his first term as mayor

When contracts to build homes were signed, the expected construction costs were significantly lower.

City Hall has asked the government for scope to increase grants to developers, but Treasury officials are said to fear that could increase inflation further.

Conservative Assembly member Andrew Boff said it was a mistake to have left so many of the promised homes until the last year and suggested the target would be missed.

"It sounds like you're getting your excuses in early," he added.

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