First Londoners benefiting from lower rents based on a third of average local wages

For the first time ever, London Living Rent (LLR) will offer Londoners on average incomes a more affordable rent, enabling them to save for a deposit. It is a new type of affordable housing being introduced as part of the Homes for Londoners programme, aimed to tackle the housing crisis.

The Mayor is introducing LLR as an intermediate affordable housing product with low rents that vary by ward across London. As a Rent to Buy product, this will help, through sub-market rents on time-limited tenancies, households on average income levels to save for a deposit to buy their own home.

LLR is a new intermediate affordable housing product, with rents based on one third of average local household incomes and targeted at middle-income households in London’s private rented sector who are looking to build up savings for future shared ownership or outright purchase.

Eligibility is restricted to households that are currently renting, with a maximum income of £60,000 and who are not currently able to purchase a home in the local area. When funded through the GLA’s programme, LLR is expected to actively support tenants into home ownership within 10 years.

The announcement follows the partnership with L&Q for 20,000 new homes – of which at least 12,000 will be genuinely affordable – that was announced last month.

The Mayor Sadiq Khan  met tenants at the first homes being delivered for London Living Rent in the capital, kick-starting his new scheme to help more Londoners find a home they can afford.

Sadiq visited County House in Beckenham this morning to meet Londoners who have already begun moving into 76 homes made available for London Living Rent – a historic new way of renting a home introduced by the Mayor as part of his affordable homes programme.

The new London Living Rent will help middle-income earners save for a deposit by offering below-market rents, based on a third of average local wages. Rents in the County House development – where all homes are affordable, managed and owned by Hyde Housing Association – are up to 30 per cent cheaper than local market rents and are based on one-third of median gross household income for Bromley.

Savings of between £300 and £400 a month

Rents at County House are set at £965 per month for a one-bed property and £1,072 for a two-bed. This compares to average rents of up to £1,300 for a one-bed and up to £1,550 for a two-bed in Beckenham – leading to savings of between £300 and £400 a month. Tenants, who will benefit from this new initiative, can put this money towards saving for a deposit, and have the chance to buy the home they are living in on a shared-ownership basis.

It comes on the same day the Mayor announced a new partnership with Hyde Housing Association to begin building up to 5,000 new housing starts over the next five years. With £115 million City Hall funding, there is an ambition for 60 per cent of the new homes – 3,000 new homes on sites across London – to be genuinely affordable to buy and rent.

It is the second provisional tranche of the Mayor’s record-breaking £3.15bn deal with the government for starting 90,000 new affordable homes by 2021.

Of these homes, two-thirds are expected to be aimed at first-time buyers and will include homes for London Living Rent and shared ownership.

Housing associations are being given the flexibility to swap homes between London Living Rent and shared ownership depending on local circumstances when homes are completed.

The Mayor of London, Sadiq Khan, said: “It is simply unacceptable that hard-working Londoners who fuel the economy of our great city are left in a position where they struggle to make ends meet. It was fantastic to see first-hand how my new London Living Rent is really helping Londoners afford to rent a home in the capital and crucially begin saving to get themselves on the property ladder. I welcome Hyde’s commitment to delivering these historic London Living Rent homes and investing in our new partnership to get on and build more new affordable homes for Londoners.”

“The number of working people in London who earn a decent wage but can’t get on the property ladder is growing all the time. These living rent properties demonstrate the Mayor of London and the Hyde Group’s desire to provide genuinely affordable homes for Londoners. We look forward to continuing our work with the Mayor and providing more London Living Rent homes for local residents.” said Elaine Bailey, Chief Executive of the Hyde Group.

During his visit to County House, the Mayor met some of the tenants taking advantage of paying cheaper rents and now in a position to save for a deposit to move into shared ownership.

Emma Mahama, 29, who is an NHS worker, had previously been living in a rented apartment for five years when her landlord decided to sell the property. When she heard about the London Living Rent scheme she thought it “was too good to be true” and has now begun saving £300 a month for a deposit to move into a shared-ownership home.

She said: “I desperately searched for a home and found they were all either way too expensive and also still having that fear about being beholden to a landlord who ‘might want to sell’ or ‘might want to move into their own property’. I felt completely trapped because I couldn’t afford to buy in a million years and the rents where I was looking at were so high I wouldn’t have been able to save for a potential deposit anyway.

“I was told about the London Living Rent scheme from an estate agent and to be honest, thought it was too good to be true. The fact you could buy the home you are currently renting was a huge decider for me. I earn a good wage in London, but the banks simply will not lend the amount needed to buy a property so you are forced to rent. On top of that the rents are so high you can never save for a deposit so, like millions of other young people in London, I faced little prospect of owning my own property. Now I can.”

Nabiel Hafez, 22, works at Canary Wharf and moved into his home with his partner in March. It is their first home together.

“My girlfriend and I were looking online and we came across London Living Rent on a housing website. We fitted the scheme perfectly and so contacted them straight away. We viewed the property and loved it. We previously lived with our parents and didn’t have enough to move out or save for a deposit. The scheme has made us independent and we really feel like this is our home.” he said.