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Coherent policy needed for London Mayor's housing commitment

London needs a more coherent housing policy if the capital is going to come anywhere close to meeting the Mayor’s aspiration of building 50, 000 new homes a year says a new report by LSE London.

The report Accelerating Housing Production in London points out that currently responsibility for housing and planning in London is split between the Mayor and 33 boroughs, which have 33 sets of planning policies, political priorities and processes.

The report recommends that boroughs agree to a uniform and transparent approach to viability rules. These allow developers to challenge the contractual requirement to build affordable homes if it would make a proposed development ‘unviable’. The report says that developers should not be allowed to reopen negotiations on settled agreements and the process of negotiation should be ‘open book’.

London Terrace HousingMore developers should be brought onto large sites across the capital because requirements for infrastructure, upfront finance and other constraints mean that these sites tend to be built out very slowly when there is only one developer. For example, of the homes planned on large sites of over 1500 units –  which make up almost a third of the pipeline – only one per cent were completed between 2009-15. 

Professor Christine Whitehead, Professor Emeritus of Housing Economics and one of the authors of the report, said: “We can only achieve a step change in the delivery of housing for London if building on these sites is accelerated.  The Greater London Authority (GLA) should take a stronger co-ordination role and the holders of planning permissions on larger sites need to be incentivized to let multiple developers work on them simultaneously. This would help create neighbourhoods that people can live in comfortably much more quickly and deliver a greater variety of dwellings for sale.”

More purpose-built private rented housing should be built because it brings in new sources of finance and investors have a strong incentive to build out sites quickly. This accommodation can also be better for tenants could benefit from longer leases, certainty about rent increases and professional management.

Boroughs should also allow established corporate landlords to provide and manage both the affordable and market housing in developments. To make this acceptable, covenants would have to clarify the rents and allocation methods for the affordable housing, and stipulate how long they should remain affordable.

Professor Whitehead said: “Since the early Eighties London has only managed to build around 15-17 000 homes a year, so ramping up to 50, 000 will be an enormous challenge. Our recommendations can help, but they are nothing like enough to meet the Mayor’s aspiration. Given London’s unique position, the national government should permit some adjustment to national housing policies to allow for a flexible, city-wide approach for the capital.”

Posted: Tuesday 5 July 2016 

For more information

Sue Windebank, LSE press office, T: 020 7955 7060, E: s.windebank@lse.ac.uk

Image: Terrace Houses in North London, Copyright Arb and licensed for reuse under this Creative Commons Licence