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Sadiq Khan's ?250m fund battles luxury developers for first time

London mayor Sadiq Khan has sealed the first deal to buy land through a new ?250m fund, as he tries to ensure that plots in the capital do not fall into the hands of developers aiming to build luxury homes.
The land fund has been used to buy two thirds of a site currently used by St Ann’s Hospital in north London which had been earmarked for the development of around 470 homes, 14pc of which would have been affordable.
But Mr Khan’s fund has stepped in to buy the site from the local NHS Trust that owns the land in Haringey and which had put the original plans together. It will now have 800 homes built on it, half of which will be affordable.
The trust had intended to sell the site on the open market, but the fund’s intervention means that it can both make a profit from the land and put more affordable homes on the site because the fund would not seek as high a margin as a developer.
Sadiq Khan's ?250m fund battles luxury developers for first time

City Hall wants to buy and prepare more sites for affordable homes

Credit:
Ed Stone/REX/Shutterstock
City Hall’s investment, which is understood to be more than ?40m, will also provide redeveloped NHS facilities on the 11.24-hectare site, including a new mental health inpatient building. Planning permission for the new health facilities was granted by Haringey Council last week.
The deal is the first as part of a new effort by City Hall to act as a middle man to open up sites in the capital to ensure that a greater proportion of new homes being built are available at a lower price.
Once the mayor’s office has resubmitted the planning permission with the higher number of affordable homes, it will sell the land on to a developer or housing association to build the homes. It will then recycle the profits from the site sale back into the fund to buy more land.
Mr Khan said: “Despite the Government still failing to give us the investment and powers we need to make a true step change in homebuilding in London, we are showing what can be done. It is an approach councils and other local authorities across the country may look to adopt to ensure they play a key role in fixing the housing crisis.”
The ?250m fund was announced last year alongside a new team to help identify and prepare sites which would be suitable for low-cost homes.
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