The plan is part of the capital’s £5 billion draft housing strategy, which includes a pledge to build 50,000 affordable homes in the capital by 2011. It is also likely to mean closer scrutiny of developers’ plans for the size, sustainability and aesthetic merit of new homes.
Mr Johnson said access to the “gap funds” would help realise the 200,000 homes in the capital that have been given the green light but on which work has not started.
The gap funds, which officials confirmed represents the lion’s share of the £5 billion budget, would also re-ignite the stalled construction sector by removing up-front costs and reducing risk.
Mr Johnson said: “Developers cannot get access to credit to develop their schemes, building has come to a virtual standstill and I am determined to act.”
The draft housing strategy includes a pledge to scrap his predecessor’s target of making half of homes in all new schemes affordable.
He has also introduced plans to fast track the planning process for housing schemes by making London Development Agency and Transport for London land available for housing developments.
But the criteria for getting access to the £5 billion kitty and the public land has not been ironed out and Mr Johnson admitted there were no plans on how to avoid part of the HCA cash ending up supporting schemes which would have gone ahead anyway.
He said: “It’s very difficult because we don’t want to use public funds to subsidise going concerns.
“We don’t want to water cannon money on developments that are going to go ahead anyway.”
But he hinted that the frozen construction sector justified the risk. He said: “We are at a stage here where house building is completely blocked.
“There is a tundra caused by the credit crunch and it is our job to jack hammer through it.”
The housing strategy seeks to remove some of the risk to developers of having empty homes in new developments by allowing institutional investors to become involved in the buy-to-let market, which in the boom years accounted for two thirds of all off-plan sales.
Cash will also be earmarked to buy unsold homes in new developments, the tenures for which could be flipped if necessary to help meet Mr Johnson’s target of 30,000 new social housing units by 2011.
There was good news also for smaller construction players, which will hope to get a slice of the £60 million earmarked for renovating some of the 84,000 empty homes in the capital to bring them up to living standard.
DEVELOPERS FACE MINIMUM STANDARDS
Boris Johnson is seeking more than a return on investment for the £5 billion the Homes and Communities Agency is pouring into the capital’s housing market.
He is seeking no less than a “later Elizabethan age” of architecture that future Londoners will be able to look back proudly on.
Developers can expect to have their designs scrutinised for size, sustainability and architectural merit and, if necessary, sent back for redrawing – even if they have already been granted planning permission.
Mr Johnson admitted that there may be disgruntled developers. But he also accused some developers of building “scandalously small”, “Hobbit homes”, which bore unhappy comparison with our contemporaries in Germany, Ireland and Australia.
The average size of a home in London is 77 sq m, compared with 206 sq m in Australia, 109 sq m in Germany and 88 sq m in Ireland.
Richard Blakeway, the mayor’s director of housing, said it was reasonable to believe housing projects receiving public funding would be expected to reach certain standards for “space, green homes and better design”.
There are no provisions to require totally private funded schemes to adhere to these standards but Mr Johnson has the power to write the architectural requirements in the coming London Plan.
£5 billion Total HCA budget
200,000 Homes with planning permission but so far unbuilt
84,000 Empty homes in London
50,000 Affordable homes by 2011…
…30,000 of which will be social housing units
£72,000 The new threshold for first-time buyers to get access to social housing schemes
50 per cent Affordable housing target scrapped
100,000 Homes at risk in big sites in East London and Thames Gateway if Mayor’s Office does not act, according to the mayor
25,000 The number of homes that the mayor believes can be accommodated on LDA land alone