Housebuilding must double in London to tackle housing crisis

New analysis shows London needs to build 90-100,000 new homes each year to tackle the housing crisis – double the number currently being built according to recent government data.

The new London Plan outlines the development of 52,000 homes, but delivery rates are currently much lower, with recent government data showing 41,718 completions in the capital in 2019/20.

The joint research from the London Housing Directors Group (LHDG) at London Councils and the G15 group of London’s largest housing associations also found that more social housing is key to meet the housing needs of low and middle-income Londoners.

The forecasts for 2021/25 highlight that private housebuilders are focused on the upper mainstream price bands, with London’s demand for affordable housing almost eight times greater than the number of homes forecast to be delivered.

The LHDG and G15 argue that increased government investment in affordable housing is needed, with the shortage of affordable housing playing a key role in London’s homelessness crisis, with the capital accounting for around two thirds of all homelessness in England.

Joanne Drew, co-chair of the London Housing Directors Group, said: ‘London’s housing crisis has dragged on for far too long and there’s no end in sight. Due to total market failure and years of underinvestment at a national level, there simply aren’t enough affordable homes being built – leaving London with enormous housing pressures and the highest homelessness rates in the country.

‘Alongside our housing association partners, boroughs are determined to build affordable homes at mass scale for hard-pressed Londoners. This is crucial for helping us achieve the government’s targets on reducing homelessness and would also give a shot in the arm to London’s economic recovery from Covid-19. But we need an immediate boost to councils’ powers and resources to make this happen.’

The report uses forecasting from Savills to demonstrate that the market is unlikely to meet the housing delivery targets in the London Plan, with the number of homes under construction forecast to be at its lowest for a decade in 2023.

The analysis also found that average house prices in the capital are 93% higher than the UK average, compared to wages that are just 49% higher.

Geeta Nanda OBE, G15 chair and chief executive of Metropolitan Thames Valley Housing (MTVH), said: ‘Tackling the housing crisis is one of the biggest challenges facing Londoners. That’s why housing associations are committed to playing our part in supporting more people to have a decent, secure, and affordable place to call home. As the largest builders and providers of affordable housing in London, we want to work with local, regional, and national government to make sure our shared ambitions are realised.  

‘As this interim report sets out, there are multiple systemic challenges and significant issues such as the building safety crisis, that need coordinated action to resolve. We hope this report helps the conversation move towards practical solutions that help more people have a home and the chance to live well.’

In related news, 115 new council flats have been delivered by Tower Hamlets as part of a development in Poplar.

Photo by Javad Amirian