The aim of the 'London Housing Bank', says the Mayor, is to accelerate the pace of development and generate additional housing supply, particularly on large, multi-phased sites.
The 'London Housing Bank' would initially offer loans to fund the building of homes at sub-market rents for a fixed period of time. At the end of this period the Mayor would be paid back (including interest) and then the homes could either continue to be rented at sub-market prices, or could be rented at market rents, or sold.
Mayor of London Boris Johnson said:
"The proposed London Housing Bank is just one of several highly innovative new schemes we are pioneering here at City Hall to help meet the needs of hard working Londoners. Through this exciting new fund we hope to provide thousands of brand new homes many years sooner than would otherwise be possible, and make them available to rent at more affordable, below market, rates for hardworking Londoners."The Mayor is consulting agencies and organisations within the housing industry on the 'London Housing Bank' proposals. The closing date for responses is the 21 May 2014.
According to an exclusive article in Inside Housing the HCA's new 'Investments' division will be headed up by bankers and will manage a £25 billion recoverable investment portfolio.
An HCA spokesperson said the investment portfolio would include policies currently administered by the HCA, such as the Help to Buy programme and Build to Rent scheme. Inside Housing says 'the HCA hopes the structure will be in place by the end of September' 2014.