Sadiq Khan plots London housebuilding frenzy to rescue the Tube

Sadiq Khan is beginning a controversial housebuilding drive to help fill a gaping hole in Transport for London’s budget, in a move that will help Tory ministers meet targets for new homes.

The London Mayor is plotting up to 46,350 new homes on land owned by the capital’s transport authority.

A commitment to press ahead with the plans is understood to have been crucial to a £1.1bn bailout from the Government to keep TfL afloat until December. It took the total central government grants during the pandemic to more than £5bn.

Mr Khan, TfL’s chairman, is now in talks with ministers over a £2.1bn taxpayer grant to finance the housebuilding project. TfL has hired Deloitte and CBRE to advise on the plans, City sources said. The project is seen by property insiders and rival politicians as a way for Boris Johnson to impose more new homes on the capital while Mr Khan faces any criticism.

TfL-Government timeline

Robert Jenrick, the Housing Secretary, wants to force local authorities to commit to new housing targets under a new Planning Bill following the Government’s commitment to build 300,000 new homes a year.

Mr Jenrick is facing opposition from a group of up to 100 Tory MPs, however. The proposed planning reforms were blamed for the Tories’ shock defeat by the Liberal Democrats in the Chesham and Amersham by-election last month.

Sarah Olney, Liberal Democrat MP for Richmond Park, said: “Building homes, particularly affordable and social homes, is vital. However, setting arbitrary targets for the number of homes in London with no regard for the quality of the homes that will be built is not the way to do things. The Conservatives seem happy to use London as a guinea pig for their new planning reforms, despite having still not presented the plans to Parliament. And to make a condition for funding for buses and trains is frankly shocking. Poorly designed homes, or homes which are unaffordable for most local residents, should not be the price that has to be paid for maintaining TfL’s services.”

TfL last week published proposals to build across 640 acres by a new subsidiary called Transport Trading Limited Properties. A number of scenarios are being considered with up to 46,350 homes to be built over the next 25 years. Property insiders estimated that the sites would be worth around £10bn.

Housing secretary Robert Jenrick is facing opposition from a group of up to 100 Tory MPs over wanting to force local authorities to commit to new housing targets under a new Planning Bill

Mr Khan is desperate to secure £15.8bn in a long-term deal from Westminster. But requests have been refused with ministers handing the Labour mayor three short-term bailouts. His decision to fall in line with the housing plans makes a multi-year funding package from taxpayers more likely.

Sir Roger Gale, Conservative MP for Thanet, said that last month’s by-election defeat should be a “wake-up” call to the Government over planning reforms.

He was, however, broadly supportive of TfL’s homes plan. “Part of my problem out in Thanet is that we are about to chew up a lot of agricultural land, and not to meet the housing needs of Thanet but to meet the housing needs of London boroughs that want to dump their people out of London,” he said.

“If Transport for London has got a lot of brownfield land, the developers won’t like it, because all developers want to build on greenfield … If you can, if you’ve got that land, then you can realise the asset and put it to good use. Well, great, why not?”

Graeme Craig, TfL director, said: “As part of our new funding deal with government, we are working with the GLA and [Housing Department] to agree a plan for housing delivery that has a clear milestone for housing, including much-needed affordable housing, to be delivered by the end of 2024.”

A Government spokesman said discussions were ongoing.

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