Harold Macmillan’s reflection on his period as Minister for Housing and Local Government reminds us that housing has always been a political issue and that to set goals in housing is to play for high stakes. For Macmillan, the risks and the commitment paid off; between 1951 and 1955 he was responsible for building 872,000 council houses in England and Wales, and set the scene for an expansion in private house-building as well (Holmans, 2005). The future for the Affordable Rent Model [ARM] is by no means so assured, but the stakes are certainly as high. House-building is at historically low levels, with a total of 118,190 homes completed in 2011-12, with only 29,080 of those contributed by the affordable sector. Meanwhile, home ownership levels in England (and in London) are falling due in part to a long-term deterioration in affordability, now exacerbated by the fallout from the banking crisis. The private rented sector has now overtaken social renting as the second largest tenure in England. This is partly due to the failure of successive governments to enable the affordable housing sector to sustain the levels of new development that Macmillan would have taken for granted.

The Affordable Housing Programme [AHP], of which ARM is one facet, is a political response to a crisis. ARM nationally is a key component in an attempt to achieve a serious affordable housing program over the period 2011-15, with lower public expenditure in the form of grants and against a backdrop of continuing economic turbulence and a prevailing political consensus about the need for fiscal austerity. In London, which is the focus of this report, the Greater London Authority [GLA] as the strategic housing authority must grapple with the implications of central government policy as well as tackle challenges that, while not solely the preserve of London, manifest themselves in specific and sometimes extreme forms in the capital. The twin themes of affordability and a housing supply that are crucial to understanding London’s housing market are also central to this report. London, like the rest of England, has a track record of chronic under-supply of new homes across all tenures. In addition, London has become unaffordable for many of those who live and work in it. With its role as international capital, and with a level of overseas investment in housing larger than the entire government’s financial commitment to England’s Affordable Housing Programme for 2011-15, London.