London mayor Ken Livingstone intends to use his increased powers to provide more subsidies to developers and housing associations for affordable housing.

The responsibilities of the London housing board were transferred to the mayor last week, as part of the government’s decision to strengthen the mayor’s authority.

Livingstone will be able to decide the broad allocation of the £1bn regional housing pot. Under the housing board, chaired by the Government Office for London, this has typically been used to fund the acquisition of existing properties for people who could not get on the housing ladder.

Livingstone, however, seems likely to favour tackling the supply rather than the demand side, so he will distribute the money to developers to allow them to lower the price of their housing. He hopes this will bring more homes on to the market.

A senior adviser to the mayor said: “He is likely to take a more aggressive approach, a more aggressive supply strategy. At the moment the programme has tended to provide the buyer with a portion of the equity.”

The adviser added that Livingstone intended to “kick ass” over planning applications, now that he had the power to grant approval for schemes refused by London councils. However, he will still only have the power to direct refusal over Olympic buildings and schemes for the expansion into the Thames Gateway.

Livingstone said he expected “one or two spectacular rows” over his almost inevitable decision to approve schemes dismissed by councils. He added that he expected the councils to fall into line then. Flashpoints are likely to be in Tory outer boroughs that take exception to his high-density policy.

Stuart Robinson, head of planning at CB Hillier Parker, said: “This won’t go down well with the boroughs but in many ways they have had it coming as the way that they have dealt with large applications has left a lot to be desired.”

He added that the way London councils had dealt with large applications often failed to reflect schemes’ strategic nature.

Andrew Whittaker, Home Builders Federation planning spokesperson, said giving wider powers to the mayor would boost housing provision as long as Livingstone was mayor. But he cautioned that it could backfire if a mayor was elected that had a less pro-development outlook.

The mayor’s new powers

  • Taking over strategic planning applications and negotiating section 106 agreements from borough councils
  • Changing council development plans
  • Setting the London housing strategy
  • Allocating housing association development funding