Sadiq Khan says there will be 鈥榮ignificant impact鈥� on affordable home building without government cash

The rising cost of construction materials and labour is 鈥渟everely impacting鈥� the delivery of affordable housing in London, the capital鈥檚 mayor has warned, with build prices on schemes rising by as much as 45%.

Mayor of London Sadiq Khan at October 2019's Mayor's Question Time

Mayor of London Sadiq Khan at October 2019鈥檚 Mayor鈥檚 Question Time

Sadiq Khan (pictured) said the 鈥渄ouble impact鈥� of Brexit and the pandemic was slowing housebuilding progress, with the cost of materials for housing rising by more than a fifth on average in the capital.

He said the rises were likely to have a 鈥渟ignificant impact鈥� on the delivery of affordable housing, with certain schemes 鈥渟everely impacted鈥�, and called for additional government funding to meet the challenge.

A statement from the mayor鈥檚 office said that one development site in south east London had seen tender prices spike by 45%, while another London borough said total build cost inflation had hit 17%.

The GLA has previously called on the government to provide funding of around 拢5bn each year to subsidise the construction of affordable homes in the capital, compared to the figure of around 拢1bn currently offered.

Khan also repeated his called that the government issue a one-off 鈥渃oronavirus recovery visa鈥� to allow foreign construction workers into the capital, given current labour shortages

Khan said: 鈥淭he twin effects of the pandemic and Brexit has hit both housebuilders and consumers hard.

鈥淚 am calling on ministers to provide the increased funding for genuinely affordable housing in London which is needed now more than ever.鈥�

鈥淗e added that without help with bricks and mortar, and enough skilled workers, work delivering affordable homes was at risk of stalling.鈥�

> Also read: A contractor鈥檚 view on volatile prices

Geeta Nanda, the chair of G15 group of London-based housing associations, and chief executive of MTVH, said rising costs of materials was 鈥渁 real challenge鈥�.

She said: 鈥淲e鈥檙e working hard [鈥 to build the homes Londoners need, but we need to address both the shortage of skilled workers and the impact of inflation on our projects.鈥�

Khan鈥檚 call came as the Federation of Master Builders issued a new State of Trade Survey which found 95% of builders were seeing a rise in material costs, with 74% having put up their prices for work and 91% expecting material costs to increase in the first part of 2022.

Brian Berry, chief executive of the FMB, said: 鈥淭oday鈥檚 State of Trade Survey data from the FMB shows these [cost] pressures aren鈥檛 going away, and there are now added fears about the impact of rising inflation.鈥�

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