New London housing strategy commits to 42,000 homes a year for the next decade
London mayor Boris Johnson has laid out plans to build 420,000 homes in London over the next ten years, an ambition that requires a doubling of the current annual output of housing.
Johnson said the Greater London Authority will support a variety of measures, including encouraging new private sector builders to enter the market, in order to meet the target of a minimum of 42,000 homes per year for the next ten years.
Under the new GLA housing strategy, published for consultation today, 15,000 of the new homes delivered annually will have to be affordable, and a further 5,000 will have to be made available for private sector renters.
Johnson said London had negotiated a £1bn share of the £3bn affordable housing settlement for 2015-18 announced by George Osborne at the summer Spending Round. He said the target would be met with the help of this funding, greater autonomy for London finances, greater institutional investment in rented housing, and use of public land.
Launching the strategy at the site of the Greenwich Square development, by Mace and Hadley Homes, Johnson said: “In the last 30 years we’ve built almost half of the homes we need, which has turned our housing problem into a crisis. There are many young people with decent jobs, including some working at City Hall, without a hope of getting on to the housing ladder.
“Our goal is to rediscover the energy and drive that built so many homes in the 1930s.”
In 2012 just 20,300 homes were built in the capital. If achieved, the figure of 42,000 homes per year would be the highest annual rate of construction since the 1930s.
Johnson dismissed the perceived negative impact of foreign investment in London housing, saying overseas buyers helped get schemes off the ground. However, the strategy does seek to address the issue by proposing to ban London developers from marketing schemes to overseas investors before launching them on the London market.
The housing strategy contains 50 individual policies, including recommending the construction of a wave of new garden suburbs, the first of which will be at the Barking Riverside site, where 10,000 homes are planned.
The mayor also plans to set up a London Housing Bank with £160m of funding to encourage developers to build out schemes more quickly. Johnson’s deputy mayor for housing, Rick Blakeway, said the GLA would ask for bids from developers for the money on the basis it would be used to build out and rent later phases of large schemes earlier than would otherwise be the case. These homes would be rented for a minimum of ten years, and then the developer would be free to sell them.
In addition, Blakeway said the GLA intended to bring to market three large GLA sites, together for a total of 3,000 homes, on the basis that a significant number of homes would be put on the market for private rent.
Blakeway said the last five years had seen nearly 7,000 housebuilders disappear from the market, and a key part of the strategy would be to encourage firms to re-enter. He said: “We’ve got to get more builders in to the market, the fact we’ve got fewer today is a real problem. In the 1930s the top 10 builders in London produced 7% of the output, today it would be around 70%.”
Blakeway said the GLA would achieve this by working with councils to identify significant numbers of small in-fill sites of less than 50 homes, which would suit new small builders. In addition he said the GLA would talk to commercial developers, builders who work in other parts of the country, and builders working overseas to try to get them to build homes in the capital.