Dame Tessa Jowell has pledged to cut developers out of the process of building homes on public land.
In a move she claims would generate tens of millions of pounds a year for social housebuilding, Labour’s London mayoral frontrunner wants to empower City Hall to take control of development on 6,000 acres of publicly-owned land.
Jowell wants to emulate the ‘delivery partner’ model used on the Olympic Park, with a new agency set up to be the housing equivalent of Transport for London.
The agency would plan its own projects, assemble land, issue construction contracts and ensure high levels of affordable housing.
By taking on responsibility for construction, Jowell wants to capture the £89,000 average profit she says developers pocket for each home they build.
Jowell’s team has calculated that figure by analysing the operating profit, margins and sales figures of Barratt, Berkeley Group, Bellway, Mount Anvil and Taylor Wimpey.
Apart from Barratt and Mount Anvil, those firms are already represented on the Greater London Authority’s London Development Panel, a framework for public landowners to award development contracts quickly and cheaply.
Jowell’s team estimates it could meet the cost of around one social home for every home built under its proposed Homes for Londoners model.
Jowell said: “Developers are making a fortune out of building homes in London. Through my plans to get the city building again, some of those profits could be generated by the city and ploughed back in to social and affordable housing.
“Through TfL, the Mayor owns enough land to fill the entire borough of Camden. With Homes for Londoners, we could operate our own building programme – putting Londoners, not developers, in charge.
“If I become mayor, we can cut out the developers, build the homes we need and generate millions to help create truly mixed communities across our city.”
