Mayor 'risking less affordable housing'

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The Greater London Authority has ruled that from February half of the properties on any new development of 10 or more units will have to be "affordable" homes for key workers and people on low incomes.

At the moment the rule only applies to developments of 15 or more units but Mayor Ken Livingstone wants to increase the number of affordable homes by lowering the threshold.

However, research by property specialists CB Richard Ellis shows the move could have the opposite effect. The firm's researchers concluded that by making small sites less profitable many may end up undeveloped or with far fewer homes built on them.

They noted that many developers currently propose schemes of 14 units to avoid the "affordable trap". Between 1998 and last year more than one in four schemes granted planning permission in inner London were for 14 units. Jennet Siebrits, head of residential research at CB Richard Ellis, said: "By the GLA's own estimate, there are 11,000 sites in London on which between 10 and 15 units can be built. However, the provision of affordable housing on a small site is often not viable and much less profitable.

"When Tower Hamlets trialled the threshold reduction there was a dramatic decrease in the number of planning applications for 14-unit developments - from 10 in 2005 to just one last year.

"The threshold change could lead to developers applying to build nine units instead of 14 on many sites, none of which will be affordable. The GLA could be unwittingly making London's housing shortage even worse."

Conservative mayoral candidate Boris Johnson said: "This looks like another one of the Mayor's rigid 'one-size-fits-all' ideas which could result in fewer homes being built, not more. I would urge him to reconsider."

A spokesman for the Mayor said CB Richard Ellis had "no evidence" to support its claims.