Rishi Sunak and Sadiq Khan clashed on Tuesday over house building in London as ministers threatened to intervene to force more brownfield development.
The Prime Minister said he understood anger that the dream of home ownership was receding for many, but the Government vowed £50 million of investment to build new homes and regenerate existing developments in London.
Some £4m will go to establish a new Euston Housing Delivery Group to maximise regeneration at the eventual London terminus of HS2 - although that has been scaled back after Mr Sunak curtailed the high-speed railway’s route north of Birmingham.
Some 8,000 new homes will be unlocked in London through a Government-backed loan package of £125 million, unlocking three major brownfield sites in Newham and Southwark.
The “brownfield presumption”, covering England’s 20 biggest towns and cities, will make it easier to get permission to build on previously developed sites, the Department for Levelling Up, Housing and Communities said.
“We all know we need to deliver more homes for Londoners, but the Labour Mayor has stood back and played politics rather than delivering for the people of this great city. This is why we are stepping in,” Mr Sunak told the Standard.
“Regenerating underused land in cities like London makes sense. The transport links, offices and shops that Londoners rely on every day are already here. And the demand is here,” he said, arguing that extra brownfield development could allow 11,500 new homes per year in the capital.
Polls show that support for the Conservatives is collapsing among younger people ahead of UK and London elections this year, driven in part by the housing crisis, with the PM accused of caving to Tory rebels by scrapping national targets for building homes.
Mr Khan, who faces off against Tory candidate Susan Hall in May, accused the Government of seeking to distract from its own “abysmal record of failure”.
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The 2019 Conservative manifesto pledged 300,000 new homes nationally, but the target has remained elusive with Mr Sunak under fire for declining to get tough against local objections in Tory seats.
Speaking on BBC Radio 4’s Today programme, housing minister Lee Rowley refused to get into a “numbers game” over any new target in the buildup to a General Election later this year.
A spokesperson for the Mayor said: “The facts are clear – London under Sadiq Khan is outbuilding the rest of the country. Housing completions in the capital have hit the highest level since the 1930s, according to the Government’s own data.”
A total of 99.8% of housing delivery is already on brownfield land in London, according to City Hall.
“Yet the Government has repeatedly ignored industry calls for greater investment in brownfield development. At least 76,000 homes could have been unlocked or accelerated if there was longer-term investment from the Government in infrastructure and brownfield sites,” the spokesperson said.
“The Mayor simply won’t take lectures from a government that has scrapped housing targets nationally, and sent people's rents and mortgages soaring.”
