New tenancy scheme to launch in London to help renters save home deposit

The first details of plans for a London Living Rent, a new type of tenancy for newly built affordable homes have been confirmed by Mayor Sadiq Khan.

He said that the programme will help average earners in London save for a deposit by offering them a below market rent based on a third of average household incomes in each borough.

New homes will be offered to low and middle income households, typically earning between £35,000 and £45,000, who are currently renting privately. Across London, this would see the rent for a two bed flat drop below £1,000 compared to average private rents of £1,450.

Further details of the new programme will be released in the coming months, but the Mayor has already begun working with housing associations and boroughs to kick start the delivery of new homes at these rent levels through their building programmes.

Khan also signalled his intention to protect London’s stock of social housing for those on low incomes. He has pledged to work with housing associations to put an end to so-called ‘rent conversions’ whereby existing social housing is re-let at higher rents.

‘We know that fixing London’s housing crisis won’t happen overnight, and we need to do everything we can to help Londoners who are struggling to pay their rents. That’s why I’m working with housing associations and councils to build new homes for London Living Rent, homes that will offer hard working, low and middle income families an alternative to renting privately so they can get by and save for a deposit,’ Khan said.

David Montague, chief executive of L&Q and the chair of the G15 of London’s biggest housing associations, said organisations are committed to working with the Mayor to make London a more affordable place to live.

‘We want to provide new homes in a way which doesn’t involve setting rents beyond the reach of ordinary Londoners. This can be achieved as part of a mainstream grant funded affordable housing and regeneration programme in which housing associations retain flexibility over rents and asset management. A new agreement could include a move away from rent conversions on existing social rented homes where we agree that these homes are fit for purpose,’ he explained.

The new Mayor of Hackney, Phil Glanville, elected last week, has made a manifesto pledge that Hackney will be the first borough to build 500 homes for London Living Rent. ‘Hackney is already building more social housing than anywhere else in the capital, but it’s also vital that there are more homes which Londoners on middle incomes can afford to rent and buy,’ he said.

‘The London Living Rent will help people who work hard but are getting priced out of our city, which is why I’m proud that my first act as Mayor is to pledge that Hackney will be the first borough to see 500 homes built at this affordable level,’ he pointed out.

‘We must make sure that all the people who make London the world’s greatest city, whatever their background, can afford to live here and take advantage of its opportunities, so I’m delighted to be working with Sadiq Khan to help make that happen,’ he added.

Source: PropertyWire 20th September 2016

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