London mayor Sadiq Khan has called on the government to commit to the £5bn emergency investment package and help the struggling housing in the wake of the pandemic.
The appeal was made ahead of Chancellor Rishi Sunak's economic statement. Khan said the emergency investment package would keep London building, help construction jobs, and increase social home inventory, Property Wire reported.
The London government and the housing sector are ready to support the recovery from the coronavirus pandemic's effects, Khan said. More than bouncing back, he said that he wants the housing sector to emerge from the health crisis to deliver social and other genuinely affordable homes. And the investment package will make it possible.
Two policies could be established using the £5bn investment package: "buyer of last resort" the tenure conversions. With the "buyer of last resort," councils and housing associations can buy unsold private houses at cost. They can then turn these properties into social housing if no open market buyer can be found.
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The tenure conversion program will help accelerate the capital's affordable homes initiative by turning houses intended for low-cost ownership into homes for social and inexpensive rent.
A full-funding would allow the program to deliver 34,597 houses at tenure divided London Affordable Rent (70 percent), London Shared Ownership (10 percent), and London Living Rent (20 percent). An estimate by the City Hall shows that this program would require 16,899 conversions from the present agreed tenures.
A task force was established last April to help the capital deal with the economic effects of the COVID-19 pandemic and lockdown. Once London emerges from the crisis, workers who bore the brunt of the pandemic and those living in overcrowded housing will be needing to have affordable housing in steady supply, G15 chair, and Network Homes chief executive Helen Evans said.
Meanwhile, the month of June saw UK house prices declining by 0.1 percent from the previous month, data from the UK Halifax House Price Index revealed. The second quarter saw a 0.9 percent decline compared to the first quarter of 2020. However, the June monthly decline is still 2.5 percent higher than in the same period last year.
Halifax managing director Russell Galley said that the decline happened as the UK property market is still in the process of emerging from the lockdown. While the drop is small, it is always worth noting as this marks the first time since 2010 that house prices fell for four consecutive months, the Property Wire report said.
Housing market activity rebounded strongly in June. New mortgage inquiries climbed up 100 percent when compared to the May figures. That increase, coupled with prospective buyers' revisiting previously put on hold purchases, resulted in transaction volumes rising sharply. Whether the trend will be sustained remains to be seen, though.
The HMRC UK Property Transactions report showed that the seasonally adjusted residential home transactions rose 16 percent in May, or 48,450. Still, that figure is approximately 49.6 percent lower compared to the same period last year.
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