What does Sadiq Khan’s win mean for London property?

What does Sadiq Khan’s win mean for London property?
Posted by James Hood

Sadiq Khan is London’s new Mayor having beaten his closest rival Zac Goldsmith. There were months of campaigning in the lead up to the May election and that included numerous promises and pledges from all parties stating how they would improve the capital.

With responsibility mostly for transport, housing and representing the city as an ambassador around the world, the mayor’s power is somewhat limited. After all, parliament is the primary governing body for both London and the whole nation, along with local government. However, there are some property related pledges that Sadiq made prior to his win and much of the city will now be expecting action as a result. So what did Sadiq promise and how is the media responding to his nomination to post of mayor?

On Sadiq’s official website, there are a few categories and promises dedicated to property. They begin with housing in general, stating ‘too many people are spending too much on rent and are unable to buy their own home’. The site continues with promises to deliver more affordable homes and put Londoners first when it comes to buying or renting them. Sadiq announced a self-imposed target of 50 per cent of all new homes in London to be genuinely affordable. He added that he aims to use mayoral powers and land to stop 'buy-to-leave' from foreign investors and to give 'first dibs' to first-time buyers and local tenants. He will end the scandal of thousands of homes in new developments being sold off-plan to overseas investors each year.

When it comes to investment in housing for London (which has widely been reported as a growing crisis), the Labour party supporter and new mayor said he has £400 million in affordable homes budget that his predecessor Boris Johnson failed to use. This money will be used to help housing associations reach a minimum of 80,000 new homes a year.

There were also a number of comments made in public that were not official manifesto pledges from the candidate. Sadiq has been vocal in his dislike for so-called ‘iceberg’ basements and the rise in people extending their homes downwards into the ground instead of moving home. He said such construction work is a nuisance to nearby residents. Sadiq has also criticised developers who sell apartments off-plan to overseas buyers.

What’s changing for private renters?
For Londoners renting privately, Sadiq also has a bold idea…a new form of affordable housing, with rent based on a third of average local income, not market rates. In addition, there will be a London-wide not-for-profit lettings agency established to promote longer-term, stable tenancies for responsible tenants and good landlords across London.

What about landlords?
Sadiq has promised to work with boroughs to set up landlord licensing schemes – naming and shaming bad landlords and promoting good ones. This will help tenants to spot a bad landlord and avoid costly moves or mistakes when it comes to renting.

What’s next for the mayor?
Since coming into power as Mayor of London, the media has constantly commented on the pledges and promises, assessing and scrutinising how feasible they are. In a recent article by The Wharf newspaper, real estate company JLL criticised the mayor’s restrictions on overseas buyers purchasing property as “wrong”. Adam Challis told the newspaper that there was little evidence of ‘buy to leave’ taking place and warned that the restrictions could mean important development plans are shelved. In another article, published by The Guardian, Dawn Foster, claimed the new mayor must now force the government to take housing issues more seriously. But the article and headline also questions his ability to keep both residents and developers on his side.

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