Mayor Biggs’s initiative could see households save up to £6,000     Pic: Wikimedia Commons; Jim (flikr)

Tower Hamlets’ mayor John Biggs has approved affordable housing developments that will see rent levels split between Tower Hamlets Living Rent and London Affordable Rent.

Under the new developments residents in three bedroom properties could save around £5,791 a year on housing. The new rent levels are targeted at working households and are planned to be set at around one-third of household incomes.

In a statement, Biggs said: “I am committed to tackling the housing crisis in our borough. That means building 1,000 new council homes and making sure rents for new affordable properties are genuinely affordable for local people.

“Our affordability commission found that many of the rents charged on new council homes under the previous administration were too high for local people.

“Our new rent levels will make new homes far more affordable to those on low incomes, saving residents up to £6,000 a year. There is still more to do to make housing more affordable, including encouraging other social landlords to adopt these lower rents, but this is definitely a big step in the right direction.”

The decision was made after the Tower Hamlets Affordability Commission found that the framework rents that dominate the housing market are increasingly unattainable for residents as market prices rise while wages remain stagnant.

Biggs has pledged to build 1,000 new homes as the new affordable rent levels cannot be applied to previously built houses.