Thursday 9 April 2015 9:18 pm
Tags: London house prices
The housing crisis could extinguish London’s growth: No party has a solution
For the best part of 30 years, London’s renaissance has seemed unstoppable. The 1980s “big bang” created a tidal wave of regeneration which swept over the city, reinvigorating areas of decline and nurturing a globally competitive super region. While an exodus of businesses and investment once appeared inevitable, London is now a hive of startup and venture capital activity. Storm clouds nonetheless gather over South East England, hanging menacingly on the horizon. Beneath them, our capital sits unsuspectingly in the shadow of a housing crisis that has the potential to not only dampen our economic success, but extinguish it altogether. The city which returned to centre-stage during the Olympics, Paralympics and Diamond Jubilee now risks watching its achievements fade away. Recent “Further Alterations to the London Plan” set housing targets for London’s boroughs to permit 42,000 new homes per year; around 6,600 short of what is necessary to meet the objectively assessed need for the next 20 years. Yet despite 58,000 houses being permitted annually during the boom and bust period from 2004 to 2012, only 24,700 were actually constructed in an average year. To meet the current need and historic backlog over 10 years would require a build rate of some 62,000 homes per year.
It is this significant shortage of homes (both targeted and delivered) which, in the absence of a coherent strategy to address it, poses the greatest threat to London’s continued success. While median household income is £35,700 per year in the capital, price rises mean that households earning less than £80,000 now qualify for forms of housing support. Those who cannot secure a property, including more affluent members of the “squeezed middle”, have been pushed to the periphery; with London’s traditional “working class” now making up less than 10 per cent of residents in 40 per cent of the city’s boroughs.
Decisive action is required. London’s population officially reached its highest ever level earlier this year and is increasing more quickly than at any other point in history. Economic growth is charging along at a faster rate than any other region of the UK. However, securing the capital’s dynamism in the longer term requires land for homes, workplaces, schools and open spaces. This means providing access to education and health facilities, improving connectivity and maintaining a supply of truly affordable housing.
The planning system is intended to support sustainable development: development that meets the needs of the present without compromising the ability of future generations to meet their own. The current approach is deeply flawed on both counts. Moreover, no major political party has any credible solution. It’s vital we tackle the issue head on; ensuring the effective coordination of strategic planning policy and infrastructure beyond the city’s limits, facilitating regeneration, densifying suburbs and critically reassessing the function and coverage of London’s Green Belt. If not, the capital we love might once again change dramatically – for the worse.
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Tags: London house prices