Increasing London’s affordable homes

The level of housing need, particularly in London, is unprecedented and should be impossible to ignore. In 2023, over 320,000 families in London were on social housing waiting lists, with over 1.2 million households across England waiting for a social home.

This report examines the critical role that housing associations play in building more social and affordable homes in London. A steep decline in government funding coupled with rising costs has resulted in housing associations turning towards the private market to finance the construction of new homes.

Summary of key points:

• Housing associations are the largest developers of social and affordable homes in England. In 2022/23, they delivered 78% of all affordable housing.

• In London, where the impacts of the housing crisis are felt the sharpest, G15 members are leading the way in affordable housing delivery, building over 10,000 homes in the capital last year.

• However, the financial challenges facing the sector significantly impact housing associations’ development pipelines. G15 members have seen a 76% drop in housing starts in London in 2023/24, compared to last year.

• Today, grant rates contribute only 12% to scheme costs compared to about 75% in the 1990s.

• Housing associations and local authorities need to match the government’s funding settlement six times over to build enough homes in the capital.

• G15 members build more than just affordable homes in London, delivering large-scale placemaking and supporting thriving communities.

• As long-term custodians of the homes we build, we work with local and national governments to unlock infrastructure investment and maximise the number of affordable homes on site.

• The government’s recent announcements on planning reform are a very positive start; combined with our development capability and long-term perspective, these reforms could be transformational.

• However, housing associations are stretched to their absolute capacity and need consistent support to continue delivering the housing the capital needs.

• We welcome indications that the government intends to introduce a long-term, inflation-linked rent settlement. To allow us to continue building genuinely affordable homes and investing in sustainable communities, this should be followed up by a clear, long-term, national housing plan that provides the sector with both funding and policy certainty.