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The Chartered Institute of Housing is the independent voice for housing and the home of professional standards

Addressing London's housing crisis

01/06/2016


Now that the excitement of the election campaign is over - and Sadiq Khan is settled in as the new London mayor - CIH London board vice chair, Martyn Kingsford OBE TD, takes stock of the challenge the Mayor faces.

Image of modern houseHousing was a priority for all the candidates and the voting public in the recent election. London is facing a critical housing shortage, with a knock-on impact on affordability as people struggle to find the homes they need and can afford.

House prices in 2014 were almost 10 times the median income; prices rose by nearly 14 per cent in the year to March 2016, while rents increased by 4.2 per cent.  

And the worst impact is the significant rise in homelessness; 74 per cent of all households in temporary accommodation and 36 per cent of all homeless acceptances in quarter three of 2015 were from London, up 10 per cent on the previous year. The number of households owed a homeless duty across all London boroughs has almost doubled in the five years since 2010. Businesses have been increasingly vocal about the risk the housing crisis poses in the long term to their - and London’s - economic growth and prosperity.

House building

So the task before our new Mayor is clear - but it is also difficult, and it will take the combined efforts and expertise of all players to engage to go towards resolving it. The key will be taking steps to increase and accelerate house building.

London requires between 50,000 and 80,000 new homes a year, but delivery has fallen well short over a long period; in 2014/15, net housing supply was up but still only reached 31,894.

More of the new housing needs to be in lower price ranges, including social rent, affordable housing and low cost ownership; Savills’ research identified the biggest gap between supply and demand lay at the lower cost levels, and increasing the tenure mix in developments is necessary to tackle this. 

So the mayor’s commitment to increasing the delivery of homes overall, of which up to 50 per cent are to be affordable (rent/ownership) is really welcome, although some question how this can be achieved given some of the wider policy drives that challenge the rental streams of housing associations (the one per cent reduction and the extension of the LHA cap for example).

Can we do it?

Overall, housing associations are positive that the ambition is achievable. The London Housing Commission, which included CIH chief executive Terrie Alafat CBE as one of the expert panel members, recommended the new Mayor work with associations to double their housing building in return for a pipeline of new sites, so it is a positive that the Mayor committed to this in his housing manifesto.

Pivotal to making it happen will be the work of the Homes for Londoners team that Sadiq Khan will set up in City Hall and working with communities, boroughs, associations and developers to drive forward development. Fully utilising all the Mayor’s levers - capacity to draw in investment, planning powers, and maximising use of public land - will be pivotal. Aligning opportunities with other infrastructure plans, and working with Transport for London to include high density development around existing and new transport hubs will help.

The private rented sector is critical in meeting the housing needs of London. However, the ending of a tenancy in the sector is now behind 47 per cent of statutory homeless cases in London, up from 17 per cent in 2010, so working with landlords and boroughs needs to be a significant part of the strategy to address the housing challenges for London.

A concentrated effort

We welcome the Mayor’s commitment to look at a London living rent and a city-wide lettings agency. We would encourage him to extend this to link with an accreditation scheme to drive up standards and incentivise landlords to work with this, including offering longer term tenancies. The Mayor is well placed to use his powers to attract in more institutional investment to increase the provision of market rent schemes.

Without a doubt we need a concentrated effort from all players to address London’s housing crisis. Our regional membership of housing professionals means we have the connections and expertise to play our part in that and we look forward to opportunities to do so.

Interested?


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