MAYOR Sadiq Khan has allowed Transport for London to sell a site to developers for less than market value so that more affordable housing can be built on the land.

Although the decision only applies to the four-acre site near Greenwich it provides an indication of the new mayor’s approach to affordable housing and highlights his determination to tackle the city’s housing crisis.

TfL is required by law to behave like a private company when it develops land and public sector organisations in general are supposed to secure the best price when they sell land.

However, this could conflict with Mr Khan’s election promise to boost the supply of affordable housing in London, which reduces the value of land to property developers.

However, this could conflict with Mr Khan’s election promise to boost the supply of affordable housing in London, which reduces the value of land to property developers

In relation to the site beside Kidbrooke station, near Greenwich, a briefing document for the mayor stated: “The requirement that the land is developed with 50pc affordable housing will reduce the land value significantly.”

That amount of affordable housing is much higher than a typical housing development in London.

TfL obtained written permission from the mayor because its ‘functions and purposes are to provide transport to, from and within London, and do not include housing functions’.

Mr Khan, on the other hand, ‘has wider functions in relation to the promotion of social development, economic development and wealth creation as well as specific responsibilities for housing in London’.

“There is a question as to whether, in the absence of a direction, TfL would be entitled to adopt a financially disadvantageous approach to disposal or development on the basis of advantages related to the provision of housing.”

Details of the mayoral decision document were first reported by the MayorWatch website.

TfL said the land, which it owns jointly with Network Rail, could accommodate 400 homes as well as 5,000 sq ft of commercial space.

The land was part of a Royal Air Force base, then was used when the A2 road was being built and has since lain largely unused.

It is one of many plots of public land that the mayor hopes to use to boost both the supply of homes and of affordable housing in London.

TfL is under financial pressure because its government funding is being cut and Mr Khan has promised to freeze fares in cash terms. “Getting homes built on public land can be hard,” said Mr Khan. He said the TfL site was one of many that “have been allowed to languish unused for far too long”.

Lawyers said it was not unusual for public bodies to dispose of land for less than the best price.

Separately on August 23, Mr Khan said he was hiring experts to scrutinise viability assessments, which are the financial details that underpin how much affordable housing is included in developments.

Sean McKee, of the London Chamber of Commerce and Industry, said: “The housing crisis in London is of utmost importance to those who live and work in the city, and so efforts to cut red tape and bring forward public land for development are welcome.”

Published in Dawn, Business & Finance weekly, August 29th, 2016