Sadiq Khan’s affordable housing targets, rent caps and locals-first sales policies have come under fire in the aftermath of his election as mayor of London.
While the industry has given his appointment a cautious welcome, many remain sceptical about key election pledges, emphasising a need to drive development and keep London “open for business”.
Residential professionals fear the introduction of rent caps could deter development and institutional investment in the private rented sector, as they did in the 1960s.
“His rent control plans are particularly worrying, as they are likely to force landlords out of the market, reduce housing supply and deter investors,” said Julian Goddard, head of residential at Daniel Watney.
Khan’s policy of a 50% affordable housing target on all new development has been criticised for having the potential to reduce the viability of schemes.
Michael Goldmann, sales and marketing director at Regal Homes, said the restrictions “will prove counterproductive and may result in pockets of land remaining undeveloped”.
Khan’s intention to use planning conditions to ensure flats are marketed to Londoners first to combat buy-to-leave also came under fire.
Adam Challis, head of JLL Residential Research, said there was little evidence of buy-to-leave actually happening, and said any restriction on demand would compromise the delivery of developments.
The consensus was that Khan needed to put more emphasis on initiatives that would increase housebuilding without stalling development.
“Constructions costs alone are increasing by around 8% each year, driven by labour and materials shortages, which makes higher-supply scenarios challenging, to say the least,” warned Challis.
Read more about the mayoral race here.
Khan’s key housing policies: what we know so far
• Give Londoners, “not overseas investors”, first dibs on affordable new-build homes
• Introduce a 50% affordable housing target for all new developments
• Introduce London Living Rent, with rent linked to a third of an average income
• Set up a London-wide not-for-profit letting agency
• Protect green belt land from development
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