London Housing Crisis: Boris Johnson Unveils £200m Scheme to Kickstart Stalled House Building

Boris Johnson has unveiled a £200m scheme to nudge London landowners with planning consent for homes to start building quickly as he looks to tackle the city's housing crisis.

The London Housing Bank scheme would loan money to developers sitting on land where they have permission to build a large amount of homes, but who are struggling to start work because of funding issues.

As a condition of the loans, the newly constructed homes must be rented to Londoners at below-market rates for a decade after completion. They can then be sold on and the loans made under the London Housing Bank scheme must be repaid.

Johnson, London's mayor, predicts that the scheme will unblock the construction of around 3,000 new homes for the capital. Consultation on the proposals ends on 21 May.

"We're doing everything we can to double house building across the capital and address a 30 year failure to build enough homes for this thriving city," said Johnson.

London's City Hall is targeting 42,000 new homes in the English capital a year, with 17,000 of them affordable and 5,000 for long-term rental.

However the capital's bloating population, which is set to hit 10 million by 2030, is putting increasing pressure on the housing supply.

A report by Hometrack found that demand for homes was so high in London that in 99% of all house sales the asking price was met or exceeded.

Nationwide said house prices in London were 18.2% higher in the first quarter of 2014 than they were a year before, hitting an average of £362,699.