Mayor's 'rent to buy' house plan

The mayor has pledged 50,000 new affordable homes by 2011

A £135m plan for subsidised housing to get middle-income Londoners on the housing ladder has been outlined by the city's mayor Boris Johnson.

About 3,000 new homes would be made available to tenants on subsidised rents under the proposals.

After six months tenants would have the opportunity to buy their property, with 5% subtracted from the house price.

But homeless charity Shelter said extra social housing for rent was needed more urgently than more houses for sale.

The mayor has pledged to build 50,000 affordable new homes by 2011.

The idea is to help people to get on to the property ladder Mayor Boris Johnson

"There are hundreds of thousands of people who find it incredibly difficult still, in spite of the fall in property values," Mr Johnson told BBC News.

He said under the scheme tenants would get "discount rents" for the properties before being able to buy the property at a 5% discount.

"The idea is to help people to get on to the property ladder and try and jump start the housing market, because it is simply frozen up at the moment," Mr Johnson added.

He admitted that previous plans to build 50,000 affordable homes by 2011 were proving difficult to bring about because of the slump in the property market.

But Mr Johnson said five estate regeneration schemes across London which had been "mothballed" were going ahead, with £93m in investment.

The mayor said this would create 1,500 new affordable homes.

Shelter chief executive Adam Sampson said: "As London's housing crisis reaches breaking point, it is right that further investment is being made to stimulate the delivery of affordable housing in the capital."

But he added: "In these times of economic hardship for so many, the mayor should prioritise building more social homes for rent rather than investing in low-cost home ownership."

'Lucky few'

This was echoed by Nicky Gavron, Labour chair of the London Assembly's planning and housing committee.

"Of course we want to help people into home ownership where we can, but there are a third of a million families already on London's housing waiting lists," she said.

"This is where the real need lies and these are the families who must be our priority."

Miss Gavron added: "Transferring more stock from public to private hands may help a lucky few get on the property ladder but will not address the real long-term housing needs of the capital."

A spokesman for the Department of Communities and Local Government said: "While we welcome any steps to improve housing affordability in the capital, we are disappointed that the mayor has prematurely announced these proposals without first securing the necessary funding approval from government."

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