London needs tens of thousands of new homes to be built every year to cope with demand for both owners and tenants as steep population growth coupled with years of undersupply of new homes means that London is bearing the brunt of the UK’s housing crisis.
With the city’s population expected to surpass its previous 1939 peak of 8.9 million early next year and continue climbing to 11.3 million by 2050, the need to make full use of public sector assets is pressing, according to the report from real estate firm Savills.
It reveals that the process of identifying and co-ordinating the delivery of sites is more advanced in London than in other part of the country. ‘The position of the Greater London Authority (GLA) as a major landowner as well as Mayoral powers to facilitate land assembly are key to delivering more homes. Boroughs are also becoming more proactive at managing their assets and building more homes,’ said Susan Emmett, director of residential research at Savills.
The firm’s analysis of the GLA’s asset database, which includes land belonging to Transport for London (TfL), London Legacy Development Corporations (LLDC), London Fire Brigade (LFB) and the Metropolitan Police Service (MPS), has identified enough public land for at least 100,000 new homes in London. Many of these sites are operational.
However, this number also includes sites for the 40,000 new homes previously earmarked by the GLA when it acquired the London property assets of the Homes and Communities Agency (HCA) worth £365 million in 2012. Of the 635 hectare portfolio inherited at that time, 85% has been developed, committed for development, or is being marketed.
Since April 2012 contractual commitments have been entered into for over 145 hectares of land, with an estimated gross development value in excess of £3.6 billion. The Mayor is committed to having an exit strategy in place for all of the GLA’s current landholdings by 2016 and the process is well advanced, the report explains.
The analysis of GLA sites marked for disposal showed that many of the saleable sites are grouped in lower value areas to the east of Canary Wharf. ‘Lower value, post-industrial land with poor infrastructure links can be difficult to bring forward through traditional development routes. A co-ordinated approach with the Mayor at the centre is essential to open up new neighbourhoods,’ it adds.
It points out that the GLA aims to assist in the regeneration of areas by investing in infrastructure and site decontamination and better transport links and investment in the public realm are also important to encourage development, especially in new areas.
‘There are some good examples of public land already being used in regeneration schemes to bring forward more homes. One major site delivering a substantial number of homes is Barking Riverside with plans for up to 10,800 homes, including 40% affordable,’ said Emmett.
The report also points out that TfL is currently consulting on the extension of the Overground to Barking Riverside where a new station would be built. If the plan goes ahead, the new station will make a significant difference to the future of the area.
Looking further ahead, the Mayor is playing a central role in shaping the vision for a new centre at Old Oak Common in west London by pulling together multiple landowners, including TfL and Borough of Hammersmith and Fulham.
Old Oak Common is set to become a transport hub at the intersection of HS2, Crossrail and Overground lines. To take advantage of this, plans for regeneration of the area with up to 19,000 new homes and 90,000 jobs are currently in a consultation process.
The 100,000 homes figure does not include assets held by the NHS or by the capital’s 32 boroughs. ‘We expect that the potential for public land in London is even greater once these other assets are taken into account,’ explained Emmett.
The report also points out that although Local Authority house building is at a very low level, many boroughs are bringing forward surplus land and regenerating council estates in partnership with private developers.
The London Borough of Camden has been particularly proactive, one example being a mixed residential and industrial site at Maiden Lane to the north of King’s Cross. This is being redeveloped to provide 273 units across 10 residential blocks, with many apartments exclusively available to local residents and key workers.
Former hospitals are also a source of new housing across various markets in London. Two different examples include the site of former Middlesex Hospital in Fitzrovia that has delivered 285 prime apartments at Fitzroy Place.
Meanwhile, the redevelopment of the former St Clement’s Hospital in Mile End is an example of how such sites can deliver mainstream housing. The site, which was originally Bow Workhouse will deliver 252 homes, including 58 social rented properties and 23 units for the East London Community Land Trust (ELCLT), a locally run non-profit organisation.
Active public assets can also provide development opportunities. Building over and around transport nodes is one example. Crossrail is the first scheme of its kind to be part funded by the revenue generated from above station property development at its own sites. The contribution to Crossrail’s core funding from the sale of development opportunities is £545 million.
This must be raised from 12 key over-station developments spanning 3 million square feet of residential, retail and office space. There are currently eight sites where permission has been granted, including Woolwich station, where Greenwich Council recently gave approval to plans for 400 homes, and Paddington where permission has been obtained for a 305,000 square foot office building.
