As James Brokenshire takes up his new role as housing secretary, his top priority must be to fix the capital’s broken housing market.
It is no exaggeration to say that London is in the midst of a housing crisis. Demand far outstrips supply; while we have built 200,000 new homes over the last decade, London’s population has grown by approximately one million people. We need to be building 66,000 new homes every year if London is to keep up with demand. Last year, we completed 26,000.
The failure to build more homes is not just a social issue – it’s a threat to London’s global competitiveness. A staggering 70 per cent of Londoners aged 25-39 say that the cost of their rent or mortgage makes it difficult to work in the capital. That doesn’t help fill up the talent pool or plug our widening skills gaps.
It is no surprise, then, that almost three quarters of businesses think London’s housing supply and costs are a significant risk to the capital’s economic growth. London firms face an annual £5.4bn wage premium – equivalent to £1,750 per person – to compensate workers for high housing costs.
In the face of this deepening crisis, it is pretty unedifying to see everyone passing the buck. Some blame property developers for land-banking. Others point the finger at local authorities and City Hall for planning bureaucracy. Some politicians have even blamed foreign buyers so they don’t have to take difficult decisions that they believe will annoy some of their voters.
But for millions of Londoners who rent, housing is the key electoral battleground, with 43 per cent agreeing it will help them decide how to vote in tomorrow’s local elections – just ahead of Brexit (42 per cent), and a candidate’s position on the NHS (37 per cent).
Over half of Londoners agree that more homes need to be built in their backyard, rising to nearly two thirds of people who live in inner London (63 per cent).
Londoners can’t find a place to call home because we are failing to build anywhere near the number of homes we need. So, as voters go to the polls on Thursday, let’s face up to what we need to do to tackle the housing crisis.
First, we need London’s councillors to back new homes, supporting the development that residents want, and thinking about better ways of building – everything from build-to-rent and micro-homes, to increasing the density of housing in the capital.
Second, we need the Greater London Authority to evolve from an organisation that sets policies and distributes limited government money into one that pushes (and, where necessary, intervenes) to drive the delivery of more homes.
Third, we need more land to build on, including public land, and a locally-led review of the green belt to ensure that what it’s protecting is truly green and pleasant.
None of this will be enough without more money from central government – to date, it has only put a down-payment on tackling the escalating housing crisis.
And finally, we need ministerial continuity. When the government appointed Alok Sharma in June 2017, that made him the fourteenth housing minister since 2000. Sajid Javid officially picked up the housing beat when his role expanded to cover housing, communities and local government in January 2018. Now he’s moved to the Home Office, leaving Brokenshire with the job.
The turnover of those responsible for housing outstrips the rate that the average Londoner moves home. Given how little time these ministers spend in office, it is no surprise that they are stuck tinkering around the edges of the problem, rather than building more homes.
To fix our housing crisis, we need more money, more land, and better ways of building.
But first, we need to jump off the ministerial merry-go-round.
Source: City A.M.