The build up to Sadiq Khan’s revised London Plan suggested we should expect a truly bold and radical vision for house building in the capital. In the end, the bullet his announcement was supposed to deliver turned out to be made of tin rather than the silver we’d hoped for.
The wow factor was distinctly lacking from the proposals and will likely go down as another opportunity missed for London. More targets, more caveats and more onus on the boroughs to meet delivery levels that we already knew about.
London needs to build more, certainly, but construction is far from being at a standstill. In our most recent analysis of London’s land and new homes market we found that since 2005 the number of private housing starts in outer London has averaged 7,092 per annum (on a rolling basis). In the first quarter of 2017, there were 3,150 new starts, 75% more than the quarterly average. The ball was already rolling, but the Mayor of London feels more can be done, and he’s right to a degree.
The onus for local authorities to deliver small sites and the ability to fasttrack certain schemes will help, but there’s no escaping the fact that a balance has to be struck between a loosening of the rules and ensuring the properties built are suitable in terms of size, location and desirability.
Private house-builders play a vital role in plugging the housing gap, but they are profit making businesses and need to ensure there is a business case and an acceptable margin in developing new sites. The Mayor’s 35% target for affordable homes on non-public sector land will have an unavoidable impact on feasibility and if this target isn’t hit it will put even more pressure on the development of public sector land to provide in excess of the 50% affordable housing target.
This will put even more pressure on those boroughs that have been set the most ambitious targets of delivering 3,000 plus units per year – Newham, Tower Hamlets, Greenwich and Barnet. And with the threshold for affordable home levels to be reviewed in 2021, it really is the stick rather than the carrot that Sadiq Khan is waving at local authorities.
There is already a growing interest in Build to Rent schemes throughout London, and the planning system is encouraged to take a positive approach to these developments in order to accelerate delivery. However, it appears there have been no specific measures announced to further fast track these schemes other than what is already in place and this could be another missed opportunity to help deliver another much needed string to London’s property bow.
House building in London is a complex issue and unfortunately there are no easy answers, but, this feels again like the Mayor has kicked the can firmly down the road.