The Mayor of London, Sadiq Kahn, and his office have pledged their support to London housing associations amidst ongoing Brexit turmoil. The protracted Brexit negotiations have led to a market slow down which has seen falling house sales and unpredictable house prices. Such a slump hits housing associations particularly hard; limited government funding means they rely on revenue from new market-value homes to subsidise affordable new-builds.
To offset the effects of the downturn, Deputy Mayor for housing and residential development, James Murray, has written to London housing associations committing to assist them through Brexit uncertainty which is "severely straining the already stretched cross-subsidy model". This includes allowing housing associations to shift homes from market / low-cost sale or shared ownership to below market-value social or intermediate rent levels. The assistance available to each housing association is dependent on both their ongoing schemes and the schemes in their development pipeline.
In total, £200m has been committed by the Mayor to supplement the Affordable Homes Programme and ensure London-centric housing associations can commit to their development pipeline and execute contracts on existing projects. This is vital for the Mayor to ensure he meets his pledge that 116,000 affordable homes would be built across London by 2022.
However, Mr Kahn stated that although the extra funding was essential, it would stretch City Hall's funding ability to the limit. Therefore, he called on the Government to at least match his pledge to ensure affordable housing continued to be built in the capital regardless of Brexit's outcome. This is the second appeal by the Mayor to the government in recent times, after he wrote a joint letter with the Paul Hackett, Chair of the G15 organisation of the largest housing associations in London, and Darren Rodwell, executive member for housing and planning at London Councils, to Housing Secretary James Brokenshire highlighting a no deal Brexit would require the government to provide immediate emergency support to protect affordable housing.
The Mayor's pledge has been received positively by housing associations, with G15 Deputy Chair Helen Evans stating, "The current market uncertainty limits our ability to generate cross-subsidy to reinvest in affordable homes so this strong, positive action to address that is welcome." With enough funding, Ms Evans believes new developments would be committed to, ensuring an increase in the level of new-affordable homes across London.