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Mayors

London's Housing Crisis Deepens as Mayor's Policy Strangles Investment

Strategic Insights

— 2 min read

The Mayor of London, Sir Sadiq Khan, is being accused by the Home Builders Federation (HBF) of making London a "no-go zone" for housing investment due to his "unrealistic" affordable housing targets. The federation's report highlights the complexity of the Mayor's London Plan, which contains 88 new policies that housebuilders must abide by, making projects more costly and time-consuming. Planning approvals in the capital have fallen by 2% in the 12 months to June, and the number of energy performance certificates granted for new homes has dropped to its lowest level since 2015.

Key Takeaways:

  • The Mayor's affordable housing target of 35% of homes in each development being affordable is deemed too high by developers, making it harder to make a profit.
  • The complexity of the London Plan, with 88 new policies, is identified as a major barrier to housebuilding, increasing costs and reducing the speed of projects.
  • Housebuilding in London is in "major crisis" according to the HBF, with an urgent overhaul of housing policy needed to stem the decline in new homes.
  • Planning approvals in the capital have fallen by 2% in the 12 months to June, to its lowest total since records began in 2006.
  • The number of energy performance certificates granted for new homes has dropped to 30,500 in the year to June, down 12% from the previous year.
  • The Government's target to deliver 88,000 homes a year in London is unlikely to be met, with the HBF suggesting output would need to rise by 175% to hit the target.
  • The Mayor's office is reworking the London Plan, but the HBF warns that without realistic requirements and suitable flexibility, new homebuilding will continue to decline.

Statistics:

  • 88: New policies in the London Plan that housebuilders must abide by, making projects more costly and time-consuming.
  • 35: Mayor's affordable housing target, deemed too high by developers.
  • 2: Percentage drop in planning approvals in the capital in the 12 months to June.
  • 30,500: Number of energy performance certificates granted for new homes in the year to June, down 12% from the previous year.
  • 175: Percentage increase in output needed to meet the Government's target of delivering 88,000 homes a year.
  • 88,000: Government's target to deliver homes a year in London.
  • 1.5 million: Number of homes the Government aims to build by the end of the current parliament.

Sources:

  • The Home Builders Federation (HBF)
  • Rightmove
  • Tim P Whitby/Getty

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