the housing challenge facing the new london mayor

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Sadiq Khan, London Mayor

 

Greene & Co. Director Shane Ballard comments on the challenge facing the new Mayor of London, Sadiq Khan.

“When the now previous Mayor of London, Boris Johnson, accepted his position at City Hall in 2008, the recession was in full swing and house prices in the Capital averaged £350,000. Fast forward eight years and they have risen by 52% to average £534,000, with the increase in value largely attributable to a lack of supply.

“Newly elected mayor, Sadiq Khan, is taking office at a time when the Capital sorely needs real and achievable solutions to solve its housing crisis. His manifesto prioritizes housing with an aim to build 80,000 homes a year, but it’s an ambitious target given that over the past eight years, Boris Johnson only managed an average of 23,840 homes per year. NIMBYism isn’t as contentious an issue in the Capital as it is outside of it, but finding appropriate sites which are cheap enough to acquire, build and then make a profit on is one of the biggest barriers to house builders, especially in light of current section 106 requirements. Releasing brownfield sites and easing planning requirements is therefore key. 

“At the heart of Sadiq’s manifesto is a focus on affordable housing and as part of this, he is looking to ensure that 50% of all new homes built are truly affordable. While this is a laudable aim, it will be difficult to achieve as it will directly affect the profits of housebuilders. As a result, we may find they simply adjust their business plans and opt instead to develop homes outside of the Capital, further impacting the London housebuilding crisis.

“While current Government measures such as Help-to-Buy and the taxes on landlords look specifically to address issues around affordability, what we really need are solutions that enable supply across all property sizes and all price levels – increasing the number of homes available and therefore diminishing competition is the only real solution that will have any long term impact on affordability.

“It is my hope that when we review Sadiq Khan’s effectiveness in 2020 we find that his fresh approach has indeed solved our housing crisis, but at present the jury is well and truly out.”

The Property Ombudsman