London mayor Boris Johnson said housing was the gravest crisis facing the city over the next decade.
Mr Johnson estimates that London will have to create 450,000 jobs and 400,000 homes in his Vision 2020 document..
To build more homes, the mayor calls for a long-term financial settlement and more strategic powers to make planning decisions.
He suggests removing the cap on councils' borrowing to build and setting up a London Housing bank, backed by pension funds, to "motivate"' the private rented sector.
In response Helen Evans, Chief Executive of Network Housing Group, part of the G15 group of the largest housing associations in London, said: “The Mayor's 'Vision 2020' report recognises that London's housing crisis is the largest stumbling block for growth and this must be urgently addressed if our capital city is to remain globally competitive, with a socially inclusive society at its heart.
"Affordability in London is no longer just an issue for the unemployed or minimum wage workers, it is a problem for the majority of young professionals and working families who are dealing with house prices rising at 3-4% annually but pay packets in London shrinking by -3.9% over the last five years. We are increasing the number of homes we're building by almost a quarter using funding from the Mayor’s Housing Covenant, so any extension of this scheme for working Londoners is going to help the long term prosperity of the capital.
"There is also a huge opportunity for London's councils to explore using their pension funds to finance social housing development, boosting economic growth locally while supporting social objectives, a win-win. It is precisely this kind of radical solution that could help to tackle this situation, which has been left to deteriorate for far too long."
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