London needs to double rate of homebuilding

London needs to build 66,000 new homes every year to meet its growing need and put right years of underinvestment, new figures have revealed.

The Mayor Sadiq Khan is calling on government to commit to profoundly boosting the funding and powers available to London at the Budget in order to meet this need, and as a first step return government funding for affordable housing in the capital to the level it was at in 2009/2010.

The new figures of housing need, released by Khan and calculated by City Hall through their Strategic Housing Market Assessment, also suggest that 65 per cent of these new homes would need to be affordable if they are to meet Londoners’ needs.

With the private sector alone unable to build this many affordable homes, it serves as a warning that the capital’s housing crisis will spiral even further out of control without a new programme of government investment and action.

The Mayor’s draft London Plan, due to be published next month, will include new measures and set ambitious targets for every London borough to move towards this goal. This is roughly double the current rate of homebuilding, and goes alongside the Mayor’s strategic target for half of new homes to be genuinely affordable housing.

Boosting homebuilding to this level will require action from the government, including the devolution of new powers to London such as those over public land and allowing councils to borrow and invest in homes, and a massive increase in government funding for homebuilding and infrastructure.

City Hall modelling suggests a requirement for government to increase funding for affordable housing alone in London to around £2.7 billion a year - more than five times current spending levels.

Overall government spending on affordable housing in London is well under half the amount spent in 2009/10 when the current government came to power and cut spending.

Khan secured a £3.15 billion deal with the government last November to start building 90,000 genuinely affordable homes by 2021 - around £0.5 billion a year. Recent announcements could see this rise to around £0.7 billon, still short of previous government spending that reached £1.75 billion in 2009/10 before being cut by the new government.

Sadiq Khan, Mayor of London, said: “Londoners know better than anyone that there has been a systematic failure for decades to build enough new homes that are genuinely affordable.

"The housing crisis is a major factor in the high cost of living in the capital, as well as putting home ownership out of the reach of many young Londoners who fear they will never get a foot on the property ladder. In the worst cases it can affect social cohesion, cause poor health, and plunge residents into poverty.

“I cannot overestimate how terrible a situation we inherited. Successive Prime Ministers have failed to invest anywhere near enough in building new affordable homes. The previous Mayor stopped investing in homes for social rent altogether and cut the number of new affordable homes he funded to the lowest level since records began.

“We can all see the results – too many luxury penthouses that only the very wealthiest investors can afford and nowhere near enough homes within reach of ordinary Londoners.

“We have spent 18 months starting the marathon job of clearing up this mess - we've had to totally rebuild the housing system from the bottom up. I’m using every power and pound I have at my disposal to tackle this crisis head on, and I am today setting tough targets for every part of London to make its contribution. Many boroughs, housing associations, homebuilders and others in London are ready to step up - but we simply can't do it on our own.

“This government keeps saying they understand the scale of London's housing crisis, but these statistics prove they are just tinkering around the edges. It's time for the Prime Minister to match her words with action and use the Budget to commit to the profound increase in investment and powers London needs to tackle this crisis once and for all.”