Mayor Sadiq Khan’s fight to hold on to millions as he fails to hit house targets

Sadiq Khan wears a hat he received as a gift during his visit to Box Up Crime gym in Ilford on January 5  (PA)
Sadiq Khan wears a hat he received as a gift during his visit to Box Up Crime gym in Ilford on January 5 (PA)

Sadiq Khan is trying to avoid having to hand back millions of pounds of Government funding if he fails to hit his affordable housing targets.

The Mayor was given £4.82 billion to start 116,000 affordable homes between 2016 and 2023. By last September, the total had reached 94,179 — 21,821 short of target. It means a record 25,000 homes need to be started in the 12-month period to March if he is to hit the target and remove the risk of forfeiting the money.

Only 3,179 were started in the first half of the current financial year. Discussions are under way with the Department for Levelling Up, Housing and Communities and Mr Khan says he is “not willing to throw in the towel”.

But critics have warned it would be a real failure to hand back cash at a time the need for more homes in London has never been greater.

He is being urged to buy new homes that developers have been unable to sell and rent them to key workers, or provide extra funds for boroughs to repurchase former council homes, to ensure all the cash is spent. It is thought that about £50 million remains unallocated from Greater London Authority reserves to subsidise the building of affordable homes.

Sian Berry, a Green member of the London Assembly, said Mr Khan’s affordable housing record was “fairly creditable” but more had to be done to help key workers and young Londoners.

She told the Standard: “The thing that would be a real failure would be handing any of this money back. Are we doing our job with the billions of pounds we were entrusted with? It wouldn’t be right to have any left in the bank at the end of this.

“We should be getting this money out of the door by buying homes directly — the GLA should be the landlord and majority owner of the properties.”

Analysis by the London Assembly found that a record 18,722 affordable homes were started in 2021-22. However it typically takes two years from start to completion and only 10,252 homes were finished last year.

The assembly estimates London needs around 31,000 new homes each year at social rent levels. An estimated 8,329 people were recorded as sleeping rough in London in 2021-22. Mr Khan said he was “breaking records in London” while nationally housebuilding rates were falling — adding that the Government had ditched its own housebuilding targets of 300,000 a year.

He said he had reached 81 per cent of the 116,000 target and blamed Brexit and Covid for causing delays, supply shortages and workforce problems.

David Bellamy, the Mayor’s chief of staff, said: “If we get to April 1, 2023, and we have delivered 116,000 starts, then there shouldn’t be any money going back to Government. If we have not, the Government could quite reasonably say, ‘You haven’t met your target, we should have a share of the money back.’

“It’s a very, very challenging situation. But equally the need for affordable housing has never been greater.”

A spokesman for Mr Khan told the Standard that “virtually all” of the £4.82 billion had been allocated. The Department for Levelling Up said it was monitoring the impact on affordable housing and would work with the GLA “to help support delivery”.