Demand for housing in London is at an all-time high. The population has just exceed the previous record, set in 1939, of 8.6 million. London is growing at 100,000 per year and by 2030 there will be 10 million of us.
This means that we need to build about 50,000 new housing units per year. For the last 10 years we have only been starting 15,000 to 20,000 housing units in London per year, so there is year-on-year under supply and a historic cumulated under-supply that I estimate at 300,000 housing units over the period from 2000.
This is why a quarter of Londoners aged 20-34 live with their parents, why the average first time buyer is 37 years old and why rents and prices are so high.
This problem is fundamentally one of supply and demand. Demand is driven by population growth, much of it driven by immigration which needs to be controlled.
The other side of the coin is supply. We must dramatically increase the number of new homes being built in London.
The Conservatives made good progress in the first term. The number of starts in London in 2010 to 2015 was 5% higher than the 5 years previous years under Labour. Local Authority and Housing Association starts were also 4% higher under the Conservatives than Labour. It is also good that the number of properties in London vacant for more than 6 months has dropped by 41% since 2010, to 0.6% of total housing stock.
The Mayor is taking action too, building 94,000 affordable homes since 2008. He has created 20 Housing Zones with £400m and is forward 24,000 homes in Old Oak Common and helping to create a growth zone in Croydon.
The London Land Commission is currently compiling a database of developable surplus public sector land, owed by bodies like TfL, the NHS and Network Rail. I would like the Commission given a mandate, perhaps under the supervisions of the Mayor or DCLG, to actively sell or develop all this land in the next 2-3 years with the proceeds being released partly to the selling body and partly released for more house building.
Requiring local authorities to grant Outline Planning consent (A “Local Development Order”) on 90% of suitable brownfield land by 2020 is also a potential game-changer. This needs to be given proper resource and relentless focus to make sure it happens fast. It will also protect the greenbelt by making brownfield development happen faster.
Home ownership could also be encouraged by making the regulatory playing field between buy-to-let mortgages and owner occupier mortgages more level. The bar is currently higher for an owner-occupier mortgage, which creates an unfair advantage for buy-to-let landlords when competing with potential owner occupiers to buy stock.
Planning departments need to be shaken up, as they are often very slow. Developers should be able to pay higher planning fees for a guaranteed service level in terms of time for turn-around. Local authorities not voluntarily bringing forward a local plan should have one made for them.
A lot has been done already. With energy and focus we can hit the 50,000 new homes a year London needs.