London’s key workers could save £6,000 in rent a year with 6,000 new discounted homes

London is one of the most expensive cities in the world.

A 2025 study from Trust For London shows renters in the capital are shelling out 52% of their income (pre-tax) to pay for a one-bedroom home, leaving many – even on what might seem like a half-decent salary – in the red at the end of the month.

But the capital needs residents on a spectrum of wages – particularly teachers, doctors, nurses and carers, which is something that the Mayor of London, Sadiq Khan, is trying to protect.

When he sought re-election in 2024, Sadiq pledged to start the process of building at least 6,000 rent-controlled homes for key workers by 2030. Now, he’s released more details about how he envisages it happening.

The new homes will be let out at rents which translate to roughly 40% of the income of the average key worker.

The savings aren’t insignificant, either, as those renting a two-bedroom home would end up with £7,000 a year extra in their pockets, while tenants of a one-bed could save nearly £4,500 each year.

At the moment, key workers account for approximately one-third of London’s working population. And yet, previous research from the Institute of Fiscal Studies found that key workers’ salaries were 8% lower when compared with those in other industries.

Plus, in November 2025, a study by SpareRoom found that someone earning the National Living Wage of £12.21 per hour needs to work 63 hours a week to maintain rent payments within the accepted affordability threshold of 30% of their income.

Those earning the voluntary London Living Wage of £14.80 would still need to work approximately 52 hours weekly to cover rent expenses.

The new policy will also include renting options for workers looking to house share, who might struggle to afford a home on their own through the same initiative.

It’s also set to be more accessible than other forms of affordable housing, like shared ownership, as it doesn’t require workers to be able to put down a deposit towards part of a mortgage.

The scheme is being funded as part of the Affordable Homes Programme, which has already received £11.7 billion in investment from the government.

Now, Sadiq is pledging that investors contribute financially, too.

Construction company Bouygues UK has already submitted a planning application that, if approved, would allow 142 new key worker homes to be built in Bermondsey, while Dolphin Living is also supportive of the scheme.

The Mayor of London, 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.’

Ben Twomey, the chief executive of Generation Rent, noted that soaring rents have made London the most expensive place to live in Europe.

Describing key workers as the ‘backbone’ of the community, he added that while they ‘care for us when we’re sick and build the homes we live in,’ many of them are simply being priced out of their city.

‘It’s right that the Mayor of London is exploring new ways to protect key workers from sky-high rents and to provide more stable, genuinely affordable homes,’ Ben said.

‘Controlling the rents of key workers is a positive first step towards a fairer approach for all of London’s renters.’

Not everyone is impressed with the scheme though. Lord Bailey AM, City Hall Conservative housing spokesperson, told Property118: ‘This isn’t a serious plan to help families and key workers but rather a distraction from the real failure: an 84% collapse in housebuilding under his watch. When you stop homes being built, it’s ordinary Londoners who pay the price. Key workers are forced further and further away from their communities.

‘London needs more homes, built faster, with the right mix of genuinely affordable housing and a proper strategy to support key workers, not another policy that looks good on paper, but leaves Londoners with less choice, fewer homes, and higher costs in the long run.’

What rent discounts are available for key workers?

While a huge step forward towards housing equality in London, this isn’t the only type of policy that’s been implemented to help key workers.

Housing associations like A2Dominion also offer schemes to help key workers specifically employed by the NHS into suitable housing. Two of the prerequisites are that applicants are working in a clinical role (not including as a doctor or dentist), and earn under £60,000 per year.

Local Space also offers discounted rent to workers employed by the St. Barts NHS Trust or teachers, but asks that income must be between £20,000 and £80,000 per year, as does Peabody.

In London specifically, Brent Council also has an initiative, which offers a one-bedroom flat at £1,120, and a two-bedroom at £1,194.

By comparison, 2025 figures from the London Assembly found that, in December 2025, the average price of a private rental was £1,927 per month – almost double the price that Brent charges for a reduced rate.

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