Number of affordable homes started in London plummets
The number of affordable homes underway in the capital has fallen far short of expectations as tight regulations and cost pressures make sites unviable.
The Greater London Authority has so far completed 871 homes under the 2021-2026 Affordable Homes Programme (AHP), according to its annual housing report.
This is just over five per cent of the current housebuilding target, which has a deadline of March 2030.
It is just over three per cent of the capital’s original housing target, which had to be reduced this May in the face of “difficult conditions”.
The GLA said that more than 12,000 of the 17,800 builds the capital needs to start to hit its 2030 target are not under way, but that they will need to be started by next year if there’s a hope of hitting the goal.
“We are far beyond a housing crisis – this is a housing emergency,” chair of the London Assembly Housing Committee, Zoë Garbett AM, said.
“The gap between what’s being delivered and what’s desperately needed is incredibly concerning,” Garbett added.
In fact, over a third of affordable homes started under the previous AHP, which ran from 2016 to 2023, are yet to be completed, with no deadline set for completion.
The figures are a “stark reminder” of the capital’s housing crisis and a reminder of “urgent need to kickstart delivery”, Stephanie Pollitt, Programme Director for Housing at BusinessLDN, said.
But Pollitt said the government’s £39bn investment into the upcoming AHP, running from 2026-2036, is “hugely welcome”.
“That money should be allocated swiftly and flexibly to crowd in additional investment, with any remaining funds left over in the national pot directed to areas of greatest need,” she said.
Why is it so hard to build affordable homes in London?
The capital faces all the same construction issues as the rest of the country – slow planning approvals, high labour costs and a lack of skills – plus even-more expensive land, new and still-being-worked-out safety regulations, and impossibly stretched councils.
London is “by some accounts” the most expensive city in the world to build in, according to the GLA.
The Centre for London has found that the upfront cost of building 88,000 homes in the capital a year – the Government’s target – is about 43 times higher than the equivalent target in the West Midlands; the thinktank put the cost per year for London at £2.2bn.
The AHP funding has been welcome, as have streamlined planning regulations and brownfield funding, but it will take time for these changes to filter through into the housing market.
Garbett said the Mayor needs to use “every tool at his disposal” to turn the affordable homes situation around, while Pollitt suggested public-private partnerships were a solution.
Working with the private sector could unlock “tens of thousands of new homes” in the capital via “innovative funding models”, she said.
“The industry stands ready to work with the government to deliver the new homes that Londoners need.”