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The Mayor of London, Boris Johnson and the Homes and Communities Agency (HCA), today unveiled a multi-million pound initiative which will help thousands of Londoners to get onto the property ladder as well as providing millions of pounds to kick start affordable housing developments that have stalled during the economic downturn.

The funding package will deliver around 3,000 new affordable homes for Londoners across a range of sites, and is also kick starting the Mayor's 'First Steps', low cost home ownership initiative, a major manifesto commitment. First Steps is designed to promote a range of products that help more Londoners to own their own home by offering a flexible alternative to the full expense of open market options.

Half of today's package is a portfolio of sites being rolled out by L&Q (London & Quadrant Housing Trust). A £42 million investment by London HCA Board will support the delivery of nearly 500 'intermediate rent' homes, which will offer occupiers a discounted rent (at 80% of the market rate) for as long as they need, until they are in a position to buy. This new package of intermediate rented homes – which L&Q will market as 'Up2U' - will trigger nearly 900 additional affordable homes for rent on the sites concerned, so the total L&Q package amounts to more than 1,400 new homes.

The HCA London Board also confirmed that it will allocate a further £93 million at five stalled development sites over the next 12 months, as part of its new £135 million strategy to kick start housing construction in the capital. This will see a further 1,500 units, with a longer term potential to provide 6,000 more, of which well over a half will be affordable homes. As well as providing flexible low cost home ownership opportunities, this huge boost to the London housing market will support the construction industry during the downturn, safeguarding jobs, and leading the way for a UK wide approach to tackling the downturn in the housing sector.

The Mayor said:
"London is taking the first major step and leading the way in tackling this housing crisis as we begin the process of helping thousands of Londoners who have been left stranded for so long in both boom time and now during the downturn.

"The money we are investing today is also a major shot in the arm for London's development sector and the economy. As this rolls out thousands of construction sector jobs will be saved but more importantly the sector will emerge strong to build and grow London when the recovery comes."

Sir Bob Kerslake, Chief Executive of the Homes and Communities Agency said: "We're doing everything we can to get projects moving and deliver well-designed homes for Londoners. Our flexible investment approach means we're able to respond quickly and effectively to bring forward affordable housing that would otherwise not get built.

"This funding package for kick starting developments will keep regeneration activity moving and provide the housing market with a much-needed confidence boost."

L&Q Chief Executive, David Montague said:

"The HCA's planned investment in our new package of Up2U sites has given L&Q the confidence to start construction that would otherwise be mothballed. L&Q is working with other housing organisations to test the scalability of this initiative so that many more mothballed sites can be started.

"With falling property prices and mortgage approvals at an all time low, people lack the confidence and money to buy. UpToYou is a simple, flexible approach that gives the customer confidence and choice. If they prefer not to buy now, they can pay a sub market rent for as long as they wish, and save for a deposit if that's what they want to do. They can buy some of their home at a time of their choosing and pay a rent for the part they don't own. Or they can buy outright. UpToYou is a straightforward offer which places the choice with the customer."