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Mayor Boris Johnson Has Announced a £220 Million Funding Boost for Affordable Low Cost Homes in the Capital

The Mayor of London, Boris Johnson, earlier this week announced his intention of £220 million worth of funding for two new schemes to help Londoners into affordable home ownership and accelerate the delivery of new homes within the capital.

Shared Ownership gets a boost

Shared Ownership helps first time buyers on low to medium incomes own a home, requiring much lower deposits than outright sales, and will be given a further funding boost of up to £180 million with The Mayor’s First Steps Challenge Fund.

The Fund aims to fast-track the delivery of 4,000 new homes between 2015 and 2020 and is being made available on a recoverable basis so that money can be reinvested to provide more opportunities for affordable home seekers, helping achieve the Mayor’s aim of assisting 250,000 Londoners into low cost home ownership by 2025.

The Mayor is also giving up to £40 million of loan finance to Gentoo’s Genie for a new innovative housing product where buyers will need no deposit or mortgage to purchase their home and at the end of the agreement customers own 100 per cent of the home outright. The scheme aims to deliver 2,000 new homes over the next 10 years, helping people who would struggle to save a large deposit for a mortgage.

First Steps and Gentoo Genie

The Mayor has already made considerable efforts to help Londoners to own their own home with over 50,000 people expected to be helped into home ownership through his First Steps scheme over the course of his two Mayoral terms. He has also moved to remove red tape and bureaucracy in the application and purchase process, providing greater choice and flexibility for purchasers. Alongside steps to improve the mobility options available to existing purchasers of First Steps homes who need to move for family or employment reasons.

The Mayor of London, Boris Johnson said: “Shared ownership is crucial in helping the unprecedented numbers of people in London desperate for good quality low cost housing.”

Gentoo Genie provides long term Home Purchase Plans for first time buyers and long term renters which enables them to buy shares in their home every time they make a monthly payment. This is the first time the scheme is being introduced to London following Genie’s successful work in the North East of England. The GLA’s funding is from the Mayor’s Housing Covenant revolving fund and will be repaid in full within ten years.

Steve Hicks, Managing Director of Genie, said: “We set up Genie as a way to help those people who want to get onto the housing ladder but who haven’t been able to because of a number of reasons, including saving for a deposit while renting. There has been a lack of innovation in the housing market which has left would-be homeowners feeling frustrated and unable to buy their own house. This 10 year partnership with the GLA will help customers into a minimum of 2,000 new homes in the capital who otherwise would have struggled to own their own homes, because of the difficult market conditions in London.”

'The First Steps Challenge Fund is part of the £1.45bn the Mayor has secured from the Government for affordable housing delivery in 2015-18. The money is being made available on a recoverable basis and could take the form of an interest-bearing loan or equity investment, to encourage new players to deliver shared ownership homes and greater institutional investment into the tenure. When the funding is paid back it can be reinvested into delivering more homes. This is part of the Mayor’s London Housing Bank initiative to make longer term investment into housing and increase the pace of housing supply.

For more information on the Mayor's announcement and to read the full article visit London.gov.uk.