Several London councils have launched a legal battle against Sir Sadiq Khan, accusing him of turning the city into “an investment asset for the super rich” by slashing affordable housing targets. Tower Hamlets, Hackney and Lewisham are leading a Judicial Review claim filed at the High Court, backed by seven local authorities, to stop the mayor from cutting the capital’s affordable housing quota from 35 to 20 per cent.
Lutfur Rahman, executive mayor of Tower Hamlets, said: “It is a scandal to cut the affordable housing quota when the need for genuinely affordable homes has never been greater. Our city is increasingly being turned into an investment asset for the super rich rather than a place where ordinary Londoners can afford to live, work and raise a family.” He claimed the policy is already slowing housebuilding, as some developers delay schemes until the quota drops.
“London councils sue Sadiq Khan over affordable housing cuts as for-profit provider Heylo collapses.”
The legal action follows a proposal by Khan and Housing Secretary Steve Reed last year, which argued that housebuilding in London was “clearly in crisis” and that “35 per cent of nothing was nothing”. Khan had promised in 2016 that more than half of new homes would be affordable, but has since faced repeated accusations of watering down that pledge.
The challenge comes as London’s social housing waiting lists hit a 10-year high of more than 336,000 families. London Councits estimates that almost 183,000 people – one in 50 Londoners – are currently homeless. Rahman warned that the city risks becoming “a tale of two cities, with luxury apartments bought up by overseas investors and left empty”.
The crisis in affordable housing is underscored by the unraveling of Heylo, a for-profit provider that built a portfolio of 10,100 shared-ownership homes using at least £52 million of public money and £532 million from private investors. Its founder, Giles Mackay, operates from an office in London’s ultra high-end Design Centre in Chelsea Harbour but lives in Monaco. In March, two of Heylo’s asset-owning subsidiaries entered administration, putting 3,450 occupied homes at risk of sale to private owners, with no guarantee they will remain in the social housing sector.
Heylo had sidestepped full regulatory scrutiny by buying a dormant social landlord and placing its homes in unregulated investment companies, allowing it to receive public funds while generating profits. The administrators are not required to keep the homes as affordable housing, leaving residents uncertain about their future.