Wednesday 27 February 2019 6:25 pm | Updated: Monday 03 June 2019 1:41 am

Sadiq Khan asks government for £5bn grant to protect housing from no-deal Brexit

Sadiq Khan has asked the government to provide a £5.2bn emergency grant to to buffer housing in the capital from the negative effects of a no-deal Brexit.

In a letter to the housing secretary, James Brokenshire, the mayor said he remained "deeply concerned" about the impact leaving the EU without a deal would have on London.

“As representatives of organisations committed to tackling London’s housing crisis by building many more council, social rented, and other genuinely affordable homes that Londoners need, we are deeply concerned about the impact that a no deal Brexit, or a Brexit deal that is bad for the capital, would have on London,” Khan said, in a letter that was co-signed by the head of housing and planning at London Councils, Darren Rodwell, and Paul Hackett, chair of the G15 housing association group.

“Both would impact heavily on a very wide range of business and communities, with a ‘no deal’ exit being particularly catastrophic.”

They said that delivering affordable housing was of particular concern because it was dependent on cross-subsidy from the surpluses provided by building homes for sale.

"Sales receipts typically provide most of the subsidy for new affordable homes in London – far more than affordable housing grant at current rates," they said. "This places at risk the delivery of housing association development plans, potentially depriving Londoners of the homes they need and risking jobs in the supply chain."

Khan said the £5.2bn funding injection would help "de-risk" housing association programmes and would support approximately 30,000 affordable homes, which are due to start in the next 18 months.

To encourage "rapid and responsive investment in an uncertain market" councils should be freed of red tape, Khan added, such as rules that restrict the ability of councils to build more homes from the money raised from Right to Buy sales.

In the possible event that house prices fall significantly under a number of Brexit scenarios, the government should be prepared to ease the pressure on private home builders through direct lending or loan and sales guarantees, the mayor said.

A spokesperson for the ministry of housing, communities and local government said: “The government remains confident that it will secure a good Brexit deal with the EU. Our ambitious £9bn affordable homes programme will deliver 250,000 homes by 2022, including 116,000 in London.

“We have also pledged over £58m to councils to assist their Brexit preparations and providing regular communications to local leaders so they are kept well-informed.”