UK Cost of Building Homes Triples under New Programme
The cost of building affordable homes in London using a new round of government cash will almost triple, plans from the city’s mayor reveal.
About 35,000 homes are planned by 2026, paid for by £4bn of government funding – an average of £114,000 per house. The cost per house of the first programme, under which 116,000 homes were to be constructed, was £41,551. The Greater London Authority (GLA) Conservative group has accused the mayor of “failing Londoners”.
The majority of the new properties will be the social rented homes London most desperately needs, which require a higher level of grant funding. The first programme, for which £4.8bn of funding was obtained, covers the period 2016-2023 and the second overlapping programme the years 2021-26.
In total, 151,000 homes will be built, 69,000 of which have already been completed or are under construction. Over the last five years, the mayor has hit every one of his annual delivery targets agreed with the government. While the funding from central government for affordable housebuilding in London remains woefully inadequate, the mayor is confident in hitting his target of starting 82,000 new genuinely affordable homes between 2021-26.
The £8.8bn secured from the government to build affordable homes in London since 2016 is just over 37% of the total funds handed out around the UK under the two programmes. The term “affordable housing” includes social rented, affordable rented, and intermediate properties.
London’s housing targets and funding are agreed with ministers at the start of every new programme. The mayor’s office said there had been “significant” increase in the price of building homes, with currency devaluation, availability of materials and shortages of skilled construction labour all contributory factors, along with Brexit and need to replace cladding on properties following the Grenfell fire.
In 2020, work began on building 17,256 new affordable homes, supported by funding from the mayor – the highest number ever recorded by the GLA. City Hall estimates London requires £4.9bn a year for 10 years to deliver all the affordable homes required.