London’s future prosperity is in doubt unless steps – such as lifting restrictions on councils borrowing against their assets – are taken to build nearly a million homes by 2021, a new analysis shows.
London Councils, which represents London’s 33 local authorities, has carried out a new analysis of Department for Communities and Local Government (DCLG) and Greater London Authority (GLA) official housing statistics. The research says that between 2011 and 2021, 526,000 new homes will need to be built in London just to keep up with new housing demand (London’s population is expected to increase by over one million in the next decade), and that only 250,000 homes will be built on current projections.
It says that a further 283,000 homes will also need to be built to along with the 526,000 on current supply levels to meet both new demand and the backlog of housing need in London, meaning that in total, 809,000 homes are needed by 2021 to meet new housing need as well as the backlog of housing need.
Current housing supply levels suggest that there will be a deficit of 559,000 homes by 2021 – which even when excluding factors such as overcrowding still amounts to 329,000 fewer homes than London will require. This will put London’s future status as a global city at risk, say London Councils, while adding huge pressures to government and individuals’ budgets.
Mayor Sir Steve Bullock, London Councils’ Executive Member for Housing, said: “The news that London needs almost a million homes by 2021 is a scandal – the last time we faced such an acute housing supply crisis was after the Second World War. This is a long time coming and the capital’s future prosperity is on the line.”
“Rising housing costs are not only a problem for those struggling to rent but for any Londoner wishing to buy their own home. If the housing crisis is not solved, costs for the London economy will continue to spiral. More working families will struggle to rent and to buy, more people could be forced out of the capital and homelessness is very likely to go up.”
London Councils’ discussion paper, which is being released ahead of the party conference season, sets out a range of policy solutions to boost housing supply. This includes lifting the “Housing Borrowing Cap” which prevents councils investing in housing.
Other policies include increasing investment in the rental sector, supporting smaller scale builders, and promoting sustainable development near London’s tube and rail network.
The report estimates 134,000 homes could be built if all these measures and others were taken forward.
Mayor Sir Steve Bullock added: “With London’s population expected to top nine million by 2021, we need to use the party conference season to explore the radical strategic steps needed to build almost a million homes – such as lifting unnecessary restrictions on councils borrowing to invest in new homes and helping small businesses win construction contracts.”