London needs nearly 50,000 net new homes every year to meet the demand of a growing population. However, in the year to March 2016, the number of net new homes in the Capital was just 30,390 – 28% below the required number. Over the last five years, the average annual number of net private new homes in London has been just 12,800.
The Government’s Housing White Paper, released in February, was an admission from Westminster that something needs to be done to address the issue on a national basis. Plans to support small and medium sized house builders, amend the national planning policy framework to free up land, and accelerate construction of sites with planning permission will all help. But many wanted the Chancellor, Phillip Hammond, to take housing issues further in his spring Budget.
As it was, the Chancellor decided to swerve housing almost completely. Many believed this was due to Number 11 wanting the Housing White Paper to ‘bed down’ before any further tweaks or announcements were made. Some argued that Phillip Hammond was keeping his powder dry for the autumn when he was scheduled to deliver the second Budget of 2017.
The Prime Minister then took the country by surprise and called a snap general election to be held on Thursday 8 June 2017. While Brexit will dominate the campaign narratives of the major parties there will be calls for each party to set out clear policies on housing. Labour has already pledged to build 1,000,000 over the next five years if voted into office (half of which would be council homes). The Liberal Democrats are yet to set out their stall on housing (at the time of writing), while the Conservatives are unlikely to move far away from what has already been said in February's White Paper.
But what are the issues that many want tackled in London?
- New homes: As explained above, London needs property to be built. The current government has set out its plan to tackle the issue and Londoners will want that followed through if Theresa May is still in Number 10 on 9th June. If there is a change in government, the new PM will need to quickly give developers, local councils and planning officials enough confidence and scope to get construction volumes to the required level.
- Stamp Duty: The changes to Stamp Duty Land Tax in December 2014, including the surcharge for additional homes introduced in April 2016, helped put a dampener on the top end of the market which led to a lack of confidence further down the property chain. First time buyers in particular want changes to the system to make property transactions more affordable for them. Many are pushing for stamp duty for first time purchasers to be scrapped all together. Others would like to see the threshold for lowest stamp duty band raised above the current £125,000 mark.
- Help to Buy: London Help to Buy is only available for new homes. But, as the figures above bear out, there are not enough new homes being built in the Capital. Expanding London Help to Buy to include all properties and introducing measures to prioritise first time buyers would be extremely popular.
- Shared ownership: Anyone selling a property that is under shared ownership cannot proceed with a sale unless the housing association agrees to the price offered by a buyer. This is seen by many as a restriction the market, preventing the dynamism required for transactions to filter up and down the property chain, and many are calling for this to be addressed.