Developers could escape Ken Livingstone’s strict rules on affordable housing if they build 'rental-only' accommodation, under a radical proposal by the Greater London Authority. Financial Times
Housebuilders must provide a certain level of affordable units in their schemes – typically 30, 40 or even 50% – depending on the London borough.
The system is seen as one of the biggest burdens on the industry as it means that housing schemes become much less profitable.
But today it is proposed that developers can get round the criteria if they promise the new homes are not put up for sale for a set period such as 10 years.
It is thought the mayor could allow the exemption because the capital has a shortage of rental housing, which tends to be occupied by people on lower incomes.
Developers would need an incentive to provide homes for rental because they would not get their investment back immediately.
'Because the returns from rental are lower and the investor is tying up capital for a period of time, the affordable housing requirements are...a major barrier to a build-to-let sector,' said the report, published today by the GLA and the British Property Federation.