Delivery of new affordable housing has been falling steadily since its high point in 2008. The London Plan target is to provide an additional 13,200 affordable homes annually.

Taking account of the rate at which Registered Providers acquire existing stock, this equates to a target of around 10,000 additional new homes per annum. That leaves a current supply gap of 30%.

New finance for affordable housing is limited; the loss of social housing grant is substantial in London and the capacity to replace this with higher rents is limited by the caps on Universal Credit that are due to take effect in 2013.

The more pro-active Registered Providers are continuing to issue bonds to finance new development, but to achieve the extra scale of housing required, more resources are needed. It is no coincidence that local authorities now have much greater financial freedom to use their own land holdings to fill this gap.

Taken from
Spotlight: London's Housing Supply, July 2012