The Mayor of London, Sadiq Khan, has introduced a new initiative to expand the availability of affordable, rent-controlled homes across the city for key workers. The plan aims to create at least 6,000 “Key Worker Living Rent” homes by 2030, providing housing at rents calculated on 40 per cent of the average net household income for these roles. For a two-bedroom home, this could result in annual savings of around £7,000 compared with typical private sector rents.
The scheme targets workers who are essential to the city’s daily functioning, including nurses, teachers, carers, and bus drivers. Key workers make up about a third of the London workforce and often face difficulty accessing social housing while struggling to afford private rental costs. By linking rent to income rather than market rates, the initiative is designed to make housing more sustainable and predictable for tenants.
The initiative builds on previous progress in housing delivery under Sadiq Khan. Analysis by City Hall shows that since 2016, more new homes have been completed in London each year than under any prior Mayor. More than 25,000 council homes have been completed or are underway since 2018 with the support of City Hall funding. Emergency measures to unblock housing development are also being pursued in partnership with the Government.
Unlike shared ownership schemes, Key Worker Living Rent homes do not require tenants to purchase a share of the property at any stage. This model is intended to offer a simple, stable rent structure that benefits tenants while also providing consistent income streams for developers and investors. The programme will also include homes suitable for sharers, supporting single key workers who would otherwise struggle to afford housing alone.
The Mayor has called on councils, housing associations, private developers, and investors to participate in the programme. Funding is available through the Affordable Homes Programme, which has secured £11.7 billion for affordable housing in London over the next decade.
Sadiq Khan said: “Key workers, including teachers, nurses and bus drivers, play a critical role in keeping our city moving, working around the clock to deliver vital public services for millions of Londoners. It is only right that these hardworking Londoners can afford to live in a decent, safe home in the city they are serving. That’s why I’m proud to launch my innovative ‘Key Worker Living Rent’ scheme, which will help NHS staff, police, firefighters and others into thousands of affordable homes for long-term rent, saving potentially thousands of pounds each year. I will continue to work closely with Government and partners to do everything I can to accelerate the delivery of affordable homes, as we build a better and fairer London for everyone.”
Local leaders have welcomed the announcement. Haringey Council Leader, Cllr Peray Ahmet, said: “We want to build genuinely affordable homes for key workers in Haringey too, with rents that are tied to real wages. The Mayor’s plan for Key Worker Living Rent homes will be essential for us to drive this forward.”
Cllr Helen Dennis, Southwark Council, added: “Keyworkers are the backbone of any community and ensuring that their work is recognised and that local public services are well supported is absolutely vital. Southwark is 100% committed to the Mayor’s pledge on affordable, rent-capped homes for keyworkers, with pilot plans for over 150 homes in Bermondsey making excellent progress.”
Developers and housing associations have also expressed support. Oliver Campbell, Bouygues UK, said: “Providing keyworkers with affordable homes is a vital step in supporting those who are indispensable to our communities. Bouygues Development, the Funding Affordable Homes Housing Association, and Southwark Council are working together on a grant funding bid to help provide key worker accommodation in the Borough.”
Olivia Harris, Dolphin Living, stated: “Key workers are the backbone of London yet too many face rising housing costs that push them further from their communities and into long commutes. Providing genuinely affordable, high quality homes close to where people work is essential to retaining this workforce.”
Ben Twomey, Generation Rent, added: “Soaring rents have made London the most expensive place to live in Europe. Controlling the rents of key workers is a positive first step towards a fairer approach for all of London’s renters.”
