Recent figures released by the Mayor of London, Sadiq Khan, state that London needs to build 66,000 new homes every year to meet its growing need and put right years of underinvestment.

The Mayor is calling on the government to commit to boosting the funding and powers available to London at the upcoming Budget on 22 November in order to meet this need – and as a first step return government funding for affordable housing in the capital to the level it was at in 2009/10.

The new figures of housing need, calculated by City Hall through their Strategic Housing Market Assessment, also suggest that 65% of these new homes would need to be affordable if they are to meet Londoners’ needs. With the private sector alone unable to build this many new affordable homes, it serves as a warning that the capital’s housing crisis will spiral out of control without a profound new programme of government investment and action.

The Mayor’s draft London Plan will set ambitious targets for every London borough at roughly double the current rate of homebuilding, and goes alongside the Mayor’s strategic target for half of new homes to be affordable housing.

Boosting homebuilding to this level will require the devolution of new powers to London such as those over public land and allowing councils to borrow to invest in homes, and a massive increase in government funding for homebuilding and infrastructure. City Hall modelling suggests a requirement for government to increase funding for affordable housing alone in London to around £2.7bn a year – more than five times current spending levels.

Overall government spending on affordable housing in London - including the Prime Minister’s recent commitments - is well under half the amount spent in 2009/10 when the current government came to power and cut spending.

Last November, Khan secured a £3.15bn deal with the government to start building 90,000 genuinely affordable homes by 2021 - around £0.5bn a year. Recent announcements by the Prime Minister could see this rise to around £0.7bn - still well short of previous government spending that reached £1.75bn in 2009/10.

Since taking office, the Mayor has boosted affordable housing in the planning system from the record low of 13% in planning approvals he inherited from the previous Mayor - with affordable housing across all planning applications in the first six months of this year hitting 38%. He has also agreed investment in 50,000 new affordable homes, including those based on social rent levels.

When Boris Johnson was first given control of London’s affordable housing investment in 2012, there was funding for 1,687 homes for social rent. This figure dropped throughout his time in office to just 336 in his final year – and he left a pipeline of zero homes for social rent funded by City Hall when Khan came into office in 2016/17.

The Mayor of London, Sadiq Khan, said: “Londoners know better than anyone that there has been a systematic failure for decades to build enough new homes that are genuinely affordable.

“The housing crisis is a major factor in the high cost of living in the capital, as well as putting home ownership out of the reach of many young Londoners who fear they will never get a foot on the property ladder. 

“Many boroughs, housing associations, homebuilders and others in London are ready to step up - but we simply can't do it on our own. It’s time for the Prime Minister to match her words with action and use the Budget to commit to the profound increase in investment and powers London needs to tackle this crisis once and for all.”

Kath Scanlon, at the London School of Economics, said: “The UK as a whole doesn’t have a housing crisis - London and the southeast do. The crisis stems from strong demand and weak supply, and the Mayor’s new figures emphasise the scale of the shortfall.”

Paul Hackett, chair of the g15 – representing London’s biggest housing associations – said: “The new figures show housing need in London is even greater than previously understood. Now is the time to increase investment in affordable housing in London and to create the conditions to enable housing associations and other providers to build more homes.  The latest housing need figures demonstrate the urgent need for a bolder and longer-term approach.”

Jonathan Seager, executive director of housing at London First, said: “These new figures show us that the housing crisis is worsening. It is now one of the most serious challenges facing businesses, preventing firms from recruiting and retaining the talent they need to grow and succeed. The only way London can significantly increase housebuilding is through additional government investment and the further devolution of powers to City Hall.”