London housing's £10bn 'time bomb'

The report, commissioned by business lobby group London First from research consultant Brook Lyndhurst, added that the capital will also need £28bn invested in new housing by 2016, to accommodate the predicted 700,000 rise in its population.

David Fell, director at Brook Lyndhurst, said that current spending plans failed to account for maintenance and repair work. He called for a separate inquiry into the issue.

The news is likely to deal a further blow to the government’s decent homes target in a week where Birmingham’s tenants rejected investment plans for the city’s housing.

London First chief operating officer Jo Valentine said that insufficient money had been spent to keep London’s housing infrastructure up to scratch over recent years.

According to the report, London’s three million households spend around £1.3bn each year on “repairs, maintenance and decoration”.

Valentine added: “Maintenance costs are being talked about in a lot of public private partnership conversations just now, as companies want to know who is going to pay for the upkeep of existing housing stock.”

The report also highlighted the need for £19bn of private money to build the majority of the 43,000 houses which it says will be necessary each year.

Valentine warned that private firms might be reluctant to part with their money without clarification of what needs to be done to tackle London’s housing crisis.

“There needs to be leadership at the top level. The mayor needs to answer the question of where we are going to put an additional town the size of Leeds,” she said.

Recent studies by the Greater London Assembly and the Joseph Rowntree Foundation have found that London’s population will grow by 700,000 by 2016, and housebuilding in the south east will have to grow by 60 per cent to accommodate this.