London has been the most successful global city in the last quarter century. The brightest young people wish to live here, and it is a world leader in countless fields – professional and financial services, higher education, culture and sport among others. London’s population growth is a direct result of its success. But unless this growth is matched by housing and infrastructure provision, it will eventually stall – if not go into reverse and cause huge social tensions.
Last week, together with hundreds of other Londoners, I attended Mipim, the property industry’s “state of the nation” conference. The buzz in the London tent was confirmation that the capital is the place to be for business and property investment. But there were also a number of sessions and many conversations about London’s housing problem. The ratio of house prices to earnings has risen to an unacceptable level. High house prices are a major issue for those working in London, and contribute to our city being a high cost location for employers.
Some describe this as market failure, but the reality is that the market is simply responding to public policy measures: heavily-subsidised rents for a small proportion of the population in social housing, and severe restrictions on supply through planning policies.
Political parties may compete by announcing “targets” for house-building, but a target is not a policy and has no value without a plausible delivery plan. A solution must address supply-side constraints – and there are some innovative schemes that do precisely that.
A number of local authorities are redeveloping existing estates to provide both higher densities and more “greening” – the two are by no means incompatible. Brownfield sites are also being developed, but it is a myth that there is sufficient brownfield land that can viably be developed (an important constraint that is often ignored) to meet London’s housing needs.
Generally, London is much less densely built on than other major cities. Just 9 per cent of London is accounted for by residential buildings, compared with 24 per cent that comprises domestic gardens and 38 per cent green space. This green space must not be confused with the Green Belt, which accounts for 22 per cent of all London’s land. A full 60 per cent of the Green Belt is private agricultural land and just 22 per cent has public access or an environmental designation.
London First recently published an excellent report “The Green Belt – A Place for Londoners?”, which usefully analyses the nature of London’s Green Belt and use of space generally. It is well worth reading by anyone seriously interested in addressing the London housing problem.
Serious policy debate is on hold until after the Election, but then London’s housing problem must be seriously addressed by removing supply-side constraints. Tying this in with more devolution to London will give local government the opportunity to address this pressing problem in a joined-up way, and remove one of the major constraints to London’s growth.