Why is London failing so badly on housing?

Given we all accept the need to build more homes, and on the basis that none of us believe the government will build the one and a half million they promised in what they optimistically, and increasingly unrealistically, called their first term, one particular failing is becoming an ever more obvious scandal – and that is the extent to which the capital’s government is failing its people.

A recent report from the Combined Homelessness and Information Network recorded that the number of people living on the streets of London in April to June this year had increased by 26% over last year and was double the number compared with 10 years ago. We’re talking more than four thousand people here and, despite the mayor of London announcing a new strategy to end rough sleeping by 2030, all the indicators are that the problem is getting worse.

Given how relatively low rise London is in comparison with other European cities such as Paris, Barcelona and Rome, the Centre for Cities suggested some years ago that if only 5% of London was built to the same density as Maida Vale, which has the strange accolade of being the densest neighbourhood in the capital, it would deliver more than 1.2 million homes. Add in the welcome relaxation of the green belt to allow development on grey land and getting more homes built ought to be fairly easy. But it is patently not.

So, why is London failing so badly? Some of the reasons are self-evident. It is the most expensive place to live in the UK by a country mile. Centre for Cities estimates that the cost of building the 88,000 homes a year in London the government is targeting is about 43 times more than the cost to build the same number in the West Midlands. And yes, second staircases over seven storeys and the rest of the Grenfell-related requirements have not helped, not least by adding years of extra delay to completions in a world where, as ever, time is money.

Last year, only 35,000 homes were actually completed. Home ownership, meanwhile, has fallen from 57% in 1991 to around 47% now. Savills estimate that 25,900 affordable homes were needed and only 4,500 were delivered. We surely have to look at positive ways in which developers can afford to build and occupiers can afford to occupy.

Government has to rethink the sums needed to deliver the right volume of affordable homes. Housing associations are now in some cases not able to take the s106 homes they would love to acquire in the capital because they don’t have enough grant to do so. Planning authorities need to moderate their s106 demands to avoid situations in which developers simply can’t justify building.

CIL imposes extra costs and in some cases some London boroughs seem keener on making life difficult for small developers, to the point where infill projects that are perfectly feasible never get off the ground. One gets the sense that the current mayor places greater store on air quality, which in London is already better than Singapore or Rome, not to mention New York, Madrid, Melbourne or Tokyo, than he does on providing homes.

What is needed right from the top is a recognition that the cost of living in the capital as buyer or renter is now so high that first timers are too often forced into commuting long distances to be able to access their place of work. While WfH may help, more employers are now wanting to see their staff in person. This is a massive crisis that needs wartime levels of commitment and attention to address. The problem can be solved. But until it is taken as seriously, as current performance shows it needs to be, the future for housing in London at every level will simply be bleaker every year.