New figures claim London needs 66,000 new homes every year to sort out housing crisis

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New figures claim London needs 66,000 new homes every year to sort out housing crisis

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London needs to build 66,000 new homes every year to meet its growing need and put right years of under investment in housing but to do so more Government funding is needed for affordable houses, it is claimed.

The Mayor of London Sadiq Khan is calling on the Government to commit to profoundly boosting the funding and powers available to London in the forthcoming Budget on 22 November in order to meet this need. He says that as a first step there must be a return of Government funding for affordable housing to the level it was at in 2009/2010.

A new analysis of the figures unveiled by Khan shows that overall Government funding for affordable homes in London is still less than half if was seven years ago and it needs to rise fivefold to £2.7 billion a year to be effective.

The new figures, calculated by City Hall through their Strategic Housing Market Assessment, also suggest that 65% of these new homes would need to be affordable if they are to meet Londoners’ needs. With the private sector alone unable to build this many new affordable homes, it serves as a stark warning that the capital’s housing crisis will spiral even further out of control without a profound new programme of government investment and action.

The Mayor’s draft London Plan, due to be published next month, will include strong new measures and set ambitious targets for every London borough to move towards this goal. It is roughly double the current rate of home building and goes alongside the Mayor’s strategic target for half of new homes to be genuinely affordable housing.

Khan points out that boosting home building to this level will require the devolution of new powers to London such as those over public land and allowing councils to borrow to invest in homes, and a massive increase in government funding for home building and infrastructure.

Last November Khan secured a £3.15 billion deal with the Government to start building 90,000 genuinely affordable homes by 2021, around £0.5 billion a year. Recent announcements by the Prime Minister could see this rise to around £0.7 billion but this is still well short of previous Government spending that reached £1.75 billion in 2009/2010 before being cut by the new Government.

The Mayor is also calling on the Government to make a long term commitment to increasing funding to the levels needed to meet London’s need and says that this must sit alongside additional investment in transport and infrastructure to unlock home building, and the devolution of broad new housing and planning powers to London.

Since taking office, the Mayor has pushed the full range of powers and resources at his disposal to their furthest extent. He has boosted affordable housing in the planning system from the record low of 13% in planning approvals he inherited from the previous Mayor with affordable housing across all planning applications in the first six months of this year hitting 38%. He has also agreed investment in 50,000 new affordable homes, including those based on social rent levels.

‘Londoners know better than anyone that there has been a systematic failure for decades to build enough new homes that are genuinely affordable. The housing crisis is a major factor in the high cost of living in the capital, as well as putting home ownership out of the reach of many young Londoners who fear they will never get a foot on the property ladder. In the worst cases it can affect social cohesion, cause poor health, and plunge residents into poverty,’ said Khan.

‘Successive Prime Ministers have failed to invest anywhere near enough in building new affordable homes. The previous Mayor stopped investing in homes for social rent altogether and cut the number of new affordable homes he funded to the lowest level since records began,’ he claimed.

‘We can all see the results; too many luxury penthouses that only the very wealthiest investors can afford and nowhere near enough homes within reach of ordinary Londoners. I’m using every power and pound I have at my disposal to tackle this crisis head on, and I am today setting tough targets for every part of London to make its contribution. Many boroughs, housing associations, home builders and others in London are ready to step up but we simply can’t do it on our own,’ Khan explained.

‘This Government keeps saying they understand the scale of London’s housing crisis, but these statistics prove they are just tinkering around the edges. It’s time for the Prime Minister to match her words with action and use the Budget to commit to the profound increase in investment and powers London needs to tackle this crisis once and for all,’ he added.

According to Kath Scanlon of the London School of Economics, the current housing crisis is predominately in London and the South East and stems from strong demand and weak supply and the Mayor’s new figures emphasise the scale of the shortfall.

‘London’s elected authorities could do much more to address the housing issue if they had the tools that major cities in other countries take for granted, particularly around taxation,’ she pointed out.

Paul Hackett, chair of the g15 which represents London’s biggest housing associations, believes that the new figures show housing need in London is even greater than previously understood. ‘Now is the time to increase investment in affordable housing in London and to create the conditions to enable housing associations and other providers to build more homes. The latest housing need figures demonstrate the urgent need for a bolder and a longer term approach,’ he said.

The new figures show that the housing crisis is worsening and it is now one of the most serious challenges facing business, preventing firms from recruiting and retaining the talent they need to grow and succeed, according to Jonathan Seager, executive director for housing at London First.

‘The only way London can significantly increase house building is through additional government investment and the further devolution of powers to City Hall. Now is the time for all layers of Government to work in partnership with developers to ensure London meets its house building target,’ he said.

Source: www.propertywire.com