Archaic restrictions choke London and hinder its sustainable growth

NINETEENTH century London grew as no city had ever grown before, from 1m people in 1800, to 7m by 1900. Growth was spontaneous. People across the country saw London’s opportunities and moved to the big smoke. And yes, it was smoky then! Builders responded to increased demand, creating the terraced houses, Victorian villas, and mansion flats that still define much of our city. The idea of planners and planning was yet to be born.

Contemporaries thought that growth would continue, so in 1905 the government set up a Royal Commission on London Traffic. Its job was to work out how to cope with a population of 11m people by 1931. It advocated traffic lights, and a ring road, similar to the North and South Circulars.

In fact London stopped growing for the best part of 100 years. But it is growing again now. London is pulling ahead of the rest of the country and is, once again, a magnet for people from across Britain, and arguably from across the world. We can’t ignore this. London is full of job opportunities and a fine place to live. People will come.

If we do not respond, people will arrive, demand for housing will rise, and housing costs will increase dramatically. As a rule of thumb, a 1 per cent rise in population leads to a 2 per cent rise in prices if we build no new houses. This leads academic economists to predict that, within a generation, the average house in London will cost £500,000 in today’s terms if we build no more houses. That suits rich home owners, but it would be terrible for everyone else.

We cannot rely on the market, as we did in the nineteenth century. In planning terms we were lucky then: most people walked, so the market provided compact communities that have stood the test of time. Today the market provides sprawl: car-based cities like Los Angeles with very low standards of living. Such outcomes also lock us into carbon-intensive ways of living.

We have two choices: we can build up, or build out. In reality, both have their places. Well-designed flats – mansion blocks, and taller towers – can be very land-efficient. People like them: affluent people often choose a flat because they offer city centre convenience. But towers are expensive to build and reasonably expensive to maintain. In many ways tower block living is for the affluent, and the post-war emphasis on council towers probably a mistake.

Houses, too, make sense – particularly for families. Stable suburban communities really are the good life for children.

We are building up a little, but we are not building out. The green belt constrains us ever more tightly. We need a serious discussion about whether a decision on land use taken over half a century ago, when London was not growing, makes sense today. The idea is not simply to remove or roll back the green belt, but to think intelligently about London’s future. Areas like Richmond Park, Wimbledon Common and Bushy Park make south-west London very desirable. We should learn from that and create new suburbs, characterised by open areas, with good public access.

We can also learn from Copenhagen, which aspires not to a green belt but to green fingers, stretching in towards the centre. This is less constraining on growth, and means that more people live close to and have access to a green area. Green fingers can also provide continuous footpaths and cycle paths from suburbs to centre.

Finally, we need to sort out our transport system. I have analysed train speeds, covering the last 150 years. Many of the busiest London suburban services are now slower than in the 1950s. That makes no sense. Mega projects like Crossrail have a place, but smaller, cheaper improvements to existing lines would give the biggest returns.

London can and will grow. But it will grow more effectively and more coherently if we think about it properly than if we bury our heads in the sand. As a new mayoral term begins, thinking about London’s size, shape and future should be at the very top of their in-tray.

Tim Leunig is reader in economic history at the LSE and chief economist at CentreForum think-tank.