Crowds on Oxford Street. Chafleks CC
A new report from LSE, calling for a large-scale emergency housing package to help young Londoners into affordable homes, has been published today.
The report, Rising to the challenge: London’s housing crisis, argues that 250,000 new homes need to be built over the next decade for younger households entering the housing market for the first time. Most should be smaller units - studios, one-bedroom and some two-bedroom flats. London Mayor Sadiq Khan has a target of building 50,000 new homes per year (1), but this programme must be additional to that.
Such a package would require central government commitment, probably within the Productivity Investment Fund announced in the Autumn Statement, as well as serious commitment from the GLA and boroughs. And it would need additional resources - using land not yet in the planning system, modern methods of construction and institutional finance -initially guaranteed by government but standing alone by the end of the decade.
Professor Christine Whitehead, Emeritus Professor of Housing Economics and one of the authors of the report, said: “We’re calling for a post-student housing initiative. Over the last decade London managed to ramp up the production of purpose-built student housing to help the increasing numbers going to university. Now we need to do the same for young working households trying to buy or rent their first home.
“London’s housing crisis is too large to be addressed by traditional means. On current projections, even if London were able to double the amount of housing currently being built and do the same every year for the next twenty years, young couples and single people in London would still face worse housing conditions in 2037 than in 2011.”
According to the report more small and medium-sized housing sites are needed, which could be built out more quickly than large sites. The speculative building model which means builders build houses at a rate that maintains local housing prices also needs to be disrupted. This could be achieved, in part, by custom or self-building and the direct commissioning of new homes by local authorities and housing associations.
The report notes a number of positive approaches which are beginning to help London’s housing crisis, such as purpose-built private rented housing, known as ‘Build to Rent’. This brings in new sources of finance and investors have a strong incentive to build out sites quickly.
The permitted development policy, which allows vacant office space to be transferred into residential use relatively easily, is producing additional housing fast and could do more if extended to say retail space. But the model needs to be refined to make it more acceptable to local communities.
Professor Whitehead said: “The enormous scale of the capital’s housing problem means it is now not just a local but a national emergency. It must be addressed with political courage and additional resources including land, building capacity and finance backed by central government, the Greater London Authority and the boroughs.”
Notes to Editors
(1) The mayor has a target of building 50,000 new homes per year but this may not be enough to maintain existing accommodation standards. The Department for Communities and Local Government’s projected rate of growth of London households based on 2014 figures was higher than on 2012’s. The latest estimate is that the number of households will increase by 56,600 a year in 2012-37 (up on the estimate of 53,100 a year from the 2012 figures)