Mayor’s target for affordable homes hits housebuilders
SHARES in housebuilders fell yesterday after the Mayor of London Sadiq Khan said that 65pc of new homes built in the capital should be affordable and called for more funding to be allocated to his administration in next month’s Budget.
The news rattled investors, with the London-focused Berkeley dropping 3.5pc and FTSE 100 peer Taylor Wimpey falling 2.7pc. On the mid cap index shares in Crest Nicholson fell by 3.7pc.
The average level of affordable homes agreed in planning permissions in London is currently 38pc, and developers had already warned that a proposed 50pc target would make many sites unworkable..
Mr Khan said yesterday that in a new assessment of housing need, to be published next month, the annual target for new homes will also be revised up from 29,000 to 66,000. He criticised developers for building “too many luxury penthouses that only the very wealthiest investors can afford and nowhere near enough homes within reach of ordinary Londoners”.
Adam Challis, head of residential research at JLL, said: “The Mayor will be focused on the 50pc affordable housing level and developers should concentrate on that figure… It is in brownfield sites in outer London zones where this will be achieved.”