London mayor helps Peabody go straight to jail with £42m
0The London mayor has set his own monopoly rules by giving £42m to a housing association to pass go and develop a former prison site.
Peabody Housing has been given a loan from the mayor’s land fund to buy the site of the former Holloway Prison and develop 600 social rent homes and more than 400 affordable homes.
Peabody will work with private developer London Square, with Islington Council overseeing planning. Work must start by 2022 and Peabody must pay the loan back in full.
HM Treasury has chosen the Holloway site as a pioneer project to show how finance deals involving the sale of public land can be put together to achieve policy objectives like housing.
The project is also critical for mayor Sadiq Khan to show that his land fund is delivering. The fund will invest £1bn in 11,000 council homes for social rent over the next four years, and 3,000 other affordable rented and shared ownership homes.
The land fund comprises of £250m of City Hall investment with £500m from central government. As loans are repaid, the profits will be used to create the remaining £250m.
Khan said: “This shows what is possible on public land. We’ve been able to do this even with the limited powers we currently have. Ministers now need to play their part and give us the step-change in investment and powers over land we need to truly fix London’s housing crisis.”
