London mayor Sadiq Khan has announced plans to invest £25m into niche London developer Pocket Living.
Thanks to the cash injection, the company, which builds affordable homes through modular construction, will now start work on at least 1,059 new homes by March 2021, with a third expected to be built offsite in a factory and dropped into place, Construction Manager reports.
The funding, which will be paid back in full by the end of the next decade, will help finance ongoing site purchases for development. This will enable Pocket to raise the rate of delivery of high-density flats on small brownfield sites in the capital.
The funding package is part of the mayor’s Innovation Fund, using investment secured as part of Khan’s £3.15bn deal with government in November last year.
Pocket Living was originally formed in 2005 by Marc Vlessing, a former investment banker-turned media company chief.
The company brought the concept of the compact apartment to the capital, building one-bedroom flats for sale, on average, at 20% below market rate. It can afford this as it builds its flats smaller – at 38 sq m – than the 50 sq m usually required by the Greater London Authority’s London Plan.
Affordability in perpetuity is ensured through the lease, which stipulates that the homes can only be sold to people on a household income of less than the current London Plan affordable housing earning threshold for one- and two-bedroom homes. In this way, Pocket homes remain in the affordable arena forever.
It delivered six schemes between September 2016 and February this year.
Speaking about the new investment, Khan said: "The housing crisis is the biggest challenge facing Londoners today and I have been honest from the start that we won’t be able to turn things round overnight.
"I am working with Pocket Living to build more than a thousand homes for first-time buyers, using the latest off-site construction techniques to provide attractive and affordable homes as quickly as possible.
"I will continue to use more of my £3.15bn of funding to invest in innovative schemes like this to build the genuinely affordable homes Londoners need."
Vlessing, chief executive of Pocket, said: "Our mission has always been to open up the housing market to hard working young Londoners on low to middle incomes by delivering homes they can afford. This growing group is greatly in need of innovative housing solutions."
The investment will be used alongside £35m of funding from the Homes and Communities Agency to build homes on the first set of sites to come forward.
Image: A recent Pocket Living development at Marischal Road, Lewisham, London (Pocket Living)