Public money from the Greater London Authority will be pumped into the scheme to deliver 7,000 new homes in the Royal Docks.
The move sees City Hall becoming an active developer – intervening in London’s land market to “maximise affordable housing delivery and accelerate the speed of building”.
The initiative is being supported by nearly £2bn from government in grants and low-interest loans at 0.1% to unlock developments.
The model draws on the way many new homes are built in Singapore which has seen strong government involvement in housing for decades, with the state responsible for building around 80% of homes and owning the vast majority of land.
Khan, said: “This is a new era for housebuilding in London, with City Hall investing directly in new homes, unblocking stalled sites and speeding up development.
“Housebuilding continues to be impacted by a perfect storm of high interest rates, the rising cost of construction materials, the impact of the pandemic and Brexit and Building Safety Regulator delays.”
Ed Mayes, Executive Director of Development for the Silvertown Partnership, added: “This investment provides the certainty needed to unlock a complex site that has remained dormant for decades, allowing us to accelerate new homes, including affordable housing, alongside a vibrant new town centre for the Royal Docks.
“Over the past five years, the sector has faced exceptional pressures. In this context, coordinated public sector investment is a meaningful intervention that enables delivery where the market alone cannot.
“With this support in place, Silvertown can continue to make progress and realise its potential as a thriving new neighbourhood for east London.”
A revised masterplan for the project was signed off by Newham Council in December to deliver 7,000 homes, 1,800 of which will be affordable.
The first phase of development is delivering 1,032 homes, with more than half of those affordable, and The Guinness Partnership welcomed the first residents on site earlier this year.
The 60 acre site is owned by GLA Land and Property and work is already underway to deliver a total of 7m square feet of residential, commercial and public space. The site also includes the east London landmark, Millennium Mills, best known in recent years for its appearance in film and TV shows.
A new pedestrian and cycle bridge across Royal Victoria Dock is also progressing, supported with funding by the London Borough of Newham. The bridge will improve connections to Custom House and the Elizabeth Line.
The Silvertown Partnership has already benefited from £233m in infrastructure loan funding from Homes England to unlock the site’s potential.