Mayor Sadiq Khan wants to see a new visa and greater funding from central Government as shortages and cost rises start to derail planned affordable housing programmes.

He highlighted growing concern after a planned development in south east London saw tender returns come in 45% above estimates.

He said a south London borough reported cost inflation spiking up to 17%, while a north east London borough reported average cost increases across the board at over 10%.

Khan said the visa should offer at least 12 months to work in the UK.

He said: “From City Hall, we have worked tirelessly to get London building again, but the twin effects of the pandemic and Brexit has hit both housebuilders and consumers hard.

“Put simply, materials and labour are needed to build homes. I call on the Government to create a temporary visa scheme for construction workers, which would go some way towards alleviating the debilitating double impact of Brexit and the pandemic on the building industry.

“I am also calling on ministers to provide the increased funding for genuinely affordable housing in London that I have long called for and which is needed now more than ever. Without bricks and mortar, and enough skilled workers, the excellent progress we have made in delivering the good quality and genuinely affordable homes that Londoners need is at risk of stalling.”

Brian Berry, chief executive of the Federation of Master Builders, said: “For over a year, small builders who deliver new housing and improve existing homes either through extensions or by retrofitting, have been struggling with the twin challenges of rising prices for essential materials and severe labour shortages.

“Today’s State of Trade Survey data from the FMB shows these pressures aren’t going away, and there are now added fears about the impact of rising inflation.”

G15 social housing body chair, Geeta Nanda, said: “The rising costs of materials we are seeing across our affordable house building projects is a real challenge. We’re working hard with the Mayor and local authorities to build the homes Londoners need, but we need to address both the shortage of skilled workers and the impact of inflation on our projects.”