Some 66,000 new homes should be built in London a year, a significant rise from the current annual target of 49,000 but experts fear that even this will not be enough to meet demand.
Jules Pipe, London’s deputy mayor for planning, regeneration and skills, told an audience at the MIPIM property event in London, that building more homes is a key factor in the plan which is due to be published by the end of November.
He hinted that more affordable homes will be built and that green belt land is not likely to be developed other than derelict industrial land with the aim to use land already identified for new homes as well as pinpointing new development land.
However, according to real estate services firm Savills even this ambitious new target may not be enough even although it represents real progress as it is well below the 90,000 to 100,000 new homes it has estimated are needed to meet demand and begin to address affordability issues.
It suggests that years of undersupply in the capital means that this new target, while ambitious in the context of delivery over recent years, will not begin to make a dent on affordability and added that co-operation with surrounding local authorities is essential to relieve pressure in London’s housing markets.
‘There continues to be a massive shortfall both in London and its surrounds and it is this misalignment of housing need versus delivery which could ultimately hinder economic growth,’ said Emily Williams, Savills residential research analyst.
‘But London’s housing need cannot be considered in isolation. There needs to be an enforceable mechanism to ensure that London’s overspill housing need to be accommodated elsewhere,’ she added.
The firm also suggests that substantially more land needs to be released for housing development in the higher demand markets of London and surrounding local authorities if new homes volumes are going to increase to meet increased targets.
Savills has set out options for increasing supply in order to accommodate local housing need in these locations, together with London’s overspill. These include a comprehensive review of density policies, particularly in London, including big increases in the number of homes planned near transport hubs.
It also suggests that local authorities could release land through the green belt review process, including green belt ‘swaps’ and work in partnership, through the duty to cooperate, to allocate land to accommodate their housing need in less constrained markets.
While this co-operative approach would require a great level of strategic planning, and investment in infrastructure to ensure new housing is connected to areas of unmet need, Savills believes that a combination of all of these approaches would have the biggest impact.
