Mayor’s London Housing Bank opens to accelerate building thousands of new homes

The Mayor of London, Boris Johnson, has today opened an innovative new £200 million investment scheme for developers and housing associations that will help accelerate the building of thousands more low cost homes for Londoners.

The London Housing Bank offers tailored financial support to speed up the construction of homes compared to existing development timetables. This could include building later parts of large multi-phased housing schemes earlier than scheduled.

The Bank offers low cost loans starting at one per cent interest to incentivise development partners to build up to 4,000 homes on a range of sites, with the condition that these homes will be rented to Londoners at low cost rent (with a minimum discount to market of 20 per cent) for at least 7 years. This will result in homes being delivered several years earlier than traditional house building plans allow.

The loan will be available for up to sixteen years and after it is repaid, developers will have the option of selling the homes to the current occupiers to support home ownership, selling into the market, or retaining as affordable homes to use as long-term rent. The London Housing Bank prospectus is being launched at the same time as the Government launches a national investment scheme for developers to boost house building, with the initial funding for the Housing Bank being made available to the Greater London Authority by the Government.

The Mayor’s commitment to fast tracking development with the Housing Bank is part of a package of wider measures he is promoting to stimulate house building. He is on track to see 100,000 low cost homes built over his two terms, with more affordable homes being built this year than since 1980, as well as helping 50,000 Londoners into low cost home ownership and introducing a range of innovative new measures including new Housing Zones and accelerating purpose built rental sites.

The Mayor of London, Boris Johnson, said:

“Through the pioneering London Housing Bank, I’m challenging the capital’s developers to get building, and deliver the homes Londoners need, as fast as humanly possible. Loans are available from a £200m pot to significantly accelerate the pace of development, especially on bigger schemes, and unlock additional supply. Through this exciting new fund we hope to provide thousands of brand new homes many years sooner than would otherwise be possible for hardworking Londoners.”

All homes will be advertised on the FIRST STEPS online portal, the Mayor’s programme to help low and modest income Londoners to buy or rent in the capital at a price they can afford. The popular FIRST STEPS Affordable Homes Show will be hosted by on Saturday 4th October at the Queen Elizabeth II Conference Centre and is free to attend.

A wide range of new and existing housing providers are encouraged to bid for loans as well as private sector organisations including private registered providers and developers. Bidding will be through the Greater London Authority’s Investment Management System (IMS). The majority of funding is expected to be low cost interest bearing loans, with equity loan bids being considered on a case-by-case basis.