A new report has argued that Government should provide long- term certainty on rents to enable long-term private sector investment in London, to build the genuinely affordable homes that the city needs.
The report, released by the independent think tank Centre for London, proposes that Government should guarantee that Housing Benefit payments will rise in line with inflation for specified new homes, thereby providing investors with the certainty that they need to invest.
It suggests that these guarantees, rising to an annual total of up to £2.4bn over ten years, would:
- Support the construction of 250,000 affordable homes to rent, enough to house all the Housing Benefit claimants in the private rented sector in London.
- Save Government money from the point of first occupation, and reduce Housing Benefit expenditure by an estimated £600m per year.
Crucially, as rents in the private and social sectors have traditionally risen above the rate of inflation there may be no real cost to Government of giving such a guarantee, the report states, while also proposing that the guarantees should be administered by the Mayor of London. This would allow the housing delivery to be commissioned in the right locations across London, as part of sustainable mixed income communities.