On the eve of the Budget where housing is set to be given a major boost, the Mayor of London and council leaders have written to Chancellor Philip Hammond urging him to give them the freedom to build more affordable homes.
The Mayor Sadiq Khan and 21 London boroughs have joined forces to urge the Government to give them the powers and investment they need to build more genuinely affordable homes, including a new generation of council housing.
In a letter to the Chancellor they say that London’s housing crisis will only be brought under control if local councils and City Hall are given the money and powers they need to deliver more affordable homes for Londoners.
Councils want to be able to invest fully in building new council housing, to be able to bring forward land for new affordable homes and agree a step change in investment in affordable housing and infrastructure for City Hall, councils, and housing associations.
The Mayor and the boroughs say borrowing caps are artificially limiting boroughs’ ability to invest in new council housing, as are current restrictions on how and when councils can spend their Right to Buy receipts.
City Hall’s own analysis suggests that London needs Government investment to increase fivefold from the current £500 million a year, alongside a long term commitment to greater support for infrastructure.
The letter also calls on the Government to give City Hall and councils an effective set of powers to bring forward land at reasonable values for new affordable home building. It cites current land assembly powers as ill-suited to doing so, and underlines that land values in London have soared to £29.1 million per hectare, nearly 14 times the figure for the rest of England.
‘This is the most important Budget for London for a generation and it’s Philip Hammond’s chance to show he is serious about joining us in helping more Londoners secure a decent, affordable home,’ said Khan.
‘We want to build more affordable homes, including new council housing, and Londoners are desperate for us to do so. But we urgently need Government to play its part by giving the capital the resources, powers, and freedoms we need to underpin a step change in what we can do,’ he pointed out.
‘Archaic rules need to be reformed, a legacy of underinvestment needs to be reversed, and new powers need to be devolved to London. Turning London’s housing crisis around won’t happen overnight but the best chance we have is if London’s government, from town halls to City Hall, are put firmly in the driving seat,’ he added.
This time last year the Mayor secured a record £3.15 billion to start building 90,000 affordable homes by 2021 but, in light of new figures released last month revealing that London now needs an unparalleled 66,000 new homes every year, Khan is making the case to ministers that this must be only the beginning of significant investment in new homes across the city.
Khan also pointed out that home builders are increasingly concerned that Brexit is already having an impact on building in the capital and that this will only get worse over the coming months. Top of homebuilders’ concerns is continued access to the almost 100,000 skilled construction workers from the European Union who contribute invaluably to building the homes and infrastructure London so desperately needs.
Research from the Construction Industry Training Board has shown that 42% of London’s construction employers have already experienced the impact of Brexit, specifically suffering staff shortages, project delays and reduced levels of investment. Industry bodies are warning of the impending threat of a hard Brexit with builders, architects and surveyors expressing concern about the impact on their workforce.
The National House Building Council’s recent statistics showed the number of registrations of new homes in London in the last three months fell by 35% compared to the same period last year and Khan said this further underlines the fragility of the capital’s housing market whose growth in recent years has become over reliant on expensive properties for sale.
‘Home builders are increasingly worried that Brexit could make London’s housing crisis even worse. I fear the consequences of losing these 100,000 skilled workers would be catastrophic to London’s plans to build the genuinely affordable homes to buy and rent Londoners so desperately need,’ Khan said.
‘I urge the Government to listen to the housing industry, who are clearly concerned. Ministers need to take emergency action and give me the powers and resources I need to lead a new building programme to properly tackle the housing crisis,’ he added.
Stewart Baseley, executive chairman of the Home Builders Federation, explained that more than anywhere else in the country, house building sites in London rely heavily on foreign labour. ‘As house builders look to build more desperately needed homes in the capital the industry is ramping up recruitment and training, but it is essential we continue to have access to skilled labour. Housing output is increasing but reducing the supply of workers could threaten further increases,’ he said.
