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The Mayor of London has announced what is described as an innovative new £200 million investment scheme for developers and housing associations that will help accelerate the building of thousands more low cost homes in the city. He said that the London Housing Bank will offer 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 1% 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 % for at least 7seven years. Boris Johnson said that this will result in homes being delivered several years earlier than traditional house building plans allow. The loan will be available for up to 16 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. ‘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 £200 million pot to significantly accelerate the pace of development, especially on bigger schemes, and unlock additional supply,’ Johnson explained. ‘Through this exciting new fund we hope to provide thousands of brand new homes many years sooner than would otherwise be possible for hard working Londoners,’ he added. 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. 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… Continue reading →

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