The investment for Developer Pocket Living will see work start on at least 1,059 new homes by March 2021.
A third of the housing will be built off-site in a factory and 'dropped into place'.
As part of the Mayor's £3.15 billion Innovation Fund, the investment will help finance ongoing site purchases for development, as well as enabling Pocket to increase its rate of delivery of high-density flats on small brownfield sites. In addition, the funding will be used alongside £33.5m from the Homes and Communities Agency to build homes on the first set of sites to come forward.
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Using off-site construction where appropriate to speed up delivery, Mayor Khan said the technique will provide "attractive and affordable homes as quickly as possible".
"For decades, we have simply not built enough new and affordable homes in the capital, meaning that for too many Londoners the dream of buying their own home is getting further and further out of reach," he said.
"That is why I am working with Pocket Living to build more than a thousand homes for first-time buyers, using the latest off-site construction techniques to provide attractive and affordable homes as quickly as possible. I will continue to use more of my £3.15bn of funding to invest in innovative schemes like this to build the genuinely affordable homes Londoners need."
Chief Executive Officer of Pocket Living, Marc Vlessing, said: "Our mission has always been to open up the housing market to hard working young Londoners on low to middle incomes by delivering homes they can afford. This growing group is greatly in need of innovative housing solutions.
"City Hall's support for Pocket is yet another demonstration of the Mayor of London's commitment to tackling the capital's housing shortage and increasing the range of affordable housing options."
(LM/MH)
