The Mayor of London, Sadiq Khan, has announced the first details of his plan to introduce a 'London Living Rent'.
This new type of tenancy will be assigned to new-build affordable homes, aiming to help London renters to save for a deposit by offering them a below-market rent.
A release from the Mayor's office states that homes on the Living Rent scheme will have rents based on a third of average household incomes in each borough.
Properties will be offered to 'low and middle-income households' - earning between £35,000 and £45,000 – who are currently renting.
The Mayor says this means tenants on the scheme would benefit from an average rent of below £1,000 pcm for a two-bed flat, compared to the current average which is almost £1,500 (data released yesterday by the Tenancy Deposit Scheme indicated that the average rent for a new tenancy in the capital during August was closer to £1,800).
Work has already begun on the scheme, with the mayor's office indicating that Khan has been collaborating with housing associations and borough councils to set aside new homes in their building programmes that will be let at these rent levels.
The new Mayor of Hackney, Philip Glanville, who was elected last week, pledged in his manifesto that Hackney will be the first borough to build 500 homes for the London Living Rent.
"We know that fixing London's housing crisis won't happen overnight, and we need to do everything we can to help Londoners who are struggling to pay their rents," said Khan, who is currently on a business trip on North America.
David Montague, Chief Executive of L&Q and the Chair of the G15 of London's biggest housing associations, added: “The G15 is committed to working with the Mayor to make London a more affordable place to live. We want to provide new homes in a way which doesn't involve setting rents beyond the reach of ordinary Londoners."
“This can be achieved as part of a mainstream grant-funded affordable housing and regeneration programme in which housing associations retain flexibility over rents and asset management."