A new £200m investment scheme has been opened for developers and housing associations to help build low cost homes for Londoners.

The London Housing Bank offers tailored financial support to speed up the construction of homes compared to existing development timetables. This could include building later parts of large multi-phased housing schemes earlier than scheduled.

The Bank offers low cost loans starting at 1% interest to incentivise development partners to build up to 4,000 homes on a range of sites, with the condition that these homes will be rented to Londoners at low cost rent for at least seven years. This will result in homes being delivered several years earlier than traditional house building plans allow.

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The loan will be available for up to 16 years and after it is repaid, developers will have the option of selling the homes to the current occupiers to support home ownership, selling into the market, or retaining as affordable homes to use as long-term rent.

The London Housing Bank prospectus is being launched at the same time as the Government launches a national investment scheme for developers to boost house building, with the initial funding for the Housing Bank being made available to the Greater London Authority by the Government.

The Mayor of London, Boris Johnson, said: "Through the pioneering London Housing Bank, I'm challenging the capital's developers to get building, and deliver the homes Londoners need, as fast as humanly possible. Loans are available from a £200m pot to significantly accelerate the pace of development, especially on bigger schemes, and unlock additional supply.

"Through this exciting new fund we hope to provide thousands of brand new homes many years sooner than would otherwise be possible for hardworking Londoners."

(CD/JP)