Sadiq Khan's Phantom Homes

Sadiq Khan’s inability to tackle London’s affordable homes crisis is one of the most glaring failures of his mayoralty. It is a betrayal of the people who voted for him.

Things may be even worse than they seem. The mayor’s claims of progress not only far short of his election pledges. They appear to be based on dodgy data that conceal from the public what is really going on

My investigations have found that many of the affordable flats and houses Khan has announced as being under construction are in fact phantom homes where little or no work has begun. Others appear to have been counted twice in successive years.

The findings suggest the real number of affordable homes started last year is substantially lower than the headline figures announced by Khan. 

At best this is the result of bureaucratic incompetence, at worst City Hall is inflating the numbers to flatter the mayor’s performance on a key policy.

It is a scandalous way to manage a programme that is costing hundreds of millions of pounds of national taxpayers’ money in London every year.

As someone with more than 30 years’ experience in the property business, I have been paying close attention to Khan’s housing policies. So I was interested when he announced in April that he was “proud” construction had started on 12,526 affordable homes in London in the year to March 31st. This meant conveniently that he just hit his 12,500 target.

It immediately made me suspicious, even more so when it turned out that more than 40% of those homes -- 5,241 – had been registered in March this year alone, squeaking in just before the deadline.

So I decided to lift up the stone and take a look underneath. This is when things got seriously murky. First, I discovered the GLA does not even routinely publish the affordable housing projects it registers as starts, even though developers are receiving millions of pounds of grants from the taxpayer for them.

My team had to put in a Freedom of Information request just to see a basic list of affordable home starts. We obtained the lists for “Start on site” for March 2018 and, for comparison, March 2017. Even at first glance they were scanty and riddled with errors. 

It was time to tour the supposed building sites.

But on the sunny day in May when my team visited Acton, it was strange to see a steady trickle of office workers going in and out of their workplaces on a business park where the GLA had recorded the construction of 164 affordable homes starting 10 weeks earlier. One of them said his employer had told staff they would only be moving out in July.

There was also no sign of building activity on the site of a former print works opposite West Drayton station where 87 affordable homes were supposedly started in March. Even the development’s website said work was only going to begin in June. 

We also checked to see what was happening with projects started a year earlier. At a site in White City where 242 affordable homes were registered in March 2017, in May this year all that seemed to have happened was that the old buildings there had been knocked down. I know from my experience that progress should be far quicker than this.

When my team compared the lists from March 2017 and March 2018, we found more discrepancies. For example, the GLA recorded 253 affordable homes started in March this year at a site listed as the Enterprise Business Park on the Isle of Dogs. The list for the same month a year earlier also records 253 started in exactly the same place, though the site is given a different name, Millharbour Plaza.

Altogether, we visited 26 sites where a total of affordable 2,929 home starts were registered in March 2018. At five of the sites we identified problems, with 819 planned homes where either there was no evidence of building or they had been double-counted. This was more than a quarter of the homes checked. Excluding them would take Khan’s real total for 2017/18 to 11,707, well short of his target.

We identified a further 736 questionable starts for March 2017.

The GLA lists are littered with other gaps and mistakes, for example redacting the addresses of sites or assigning homes to the wrong location. 

It is clear Khan’s claim to have hit his target for affordable homes is based on dodgy counting. If our sample was representative of the whole year, then his performance would be significantly worse than I have suggested. 

Even the mayor’s 12,500 target represented a climbdown from his previous affordable homes pledges, which numbered at various times 40,000 and around 30,000.

This is not just a problem for Londoners who want to know the truth, but for the whole country’s taxpayers. Khan is responsible for distributing £4.82bn in grants to developers from 2016/17 to 2020/21 as London’s share of the government’s affordable housing programme. 

The subsidies are intended as an incentive to developers to build homes that would not otherwise make commercial sense because they are let or sold below market rates. Typically, developers receive between £28,000 and £60,000 per home. Until the system changed in April 2018, they were entitled to 50% of this grant at the time a home was started. 

They should not be permitted to bank the money without commitments about when they will complete the homes.

I am worried Khan’s efforts at concealment are going to get worse. The GLA quietly announced on its website recently that it would stop reporting affordable housing totals monthly and do so twice-yearly instead.

It is not acceptable that the mayor bases his boasts on dodgy data that the GLA does its best to hide. There needs to be a full professional audit of the truth behind City Hall’s inflated and shoddy figures, preferably by an independent outside body appointed by the government, which is ultimately responsible for how the money handed over by us taxpayers is spent.

City Hall should routinely publish the names of schemes and the dates they are registered, including the amount of grant money paid to their developers. Londoners and taxpayers deserve to know this basic information. 

That is the only way to hold the mayor to account and make sure he takes the action he promised to build desperately needed homes Londoners can afford.

29.06.18. My investigation has had extensive coverage since it was first reported in the London Evening Standard on 11 June 2018.  The GLA Conservatives grilled Khan during Mayor's Question Time about my findings (video). The SunThe Express, and CityAM reported that Khan lost his cool during the exchange about my findings. I have also been interviewed by LBC about it.