Mayor joins housebuilders to call for urgent investment in new homes to avoid a national downturn

• London Housing Delivery Taskforce sets out 29 proposals to safeguard the delivery of thousands of homes, with new council housing at the heart of the plan         
• Taskforce joint statement comes amidst industry warnings of country-wide housebuilding falling to the lowest level since WW2 and the Government rowing back on national housing targets
• The statement, endorsed by key partners including housing associations, local authorities, developers and industry body representatives, includes 29 recommendations for the Government to ensure the long-term viability of the capital’s housebuilding sector

• Last year, more new council homes were started in London than at any time since the 1970s and the Taskforce sets out steps to continue this record of delivery.
• New City Hall analysis reveals that a combination of additional grant funding and a new, cheaper fixed lending rate for council housing could deliver around 5,000 additional council homes in the capital

The Mayor of London, Sadiq Khan, and leaders from across London’s housebuilding sector have today delivered a new blueprint for action on housebuilding to boost the supply of new homes.

The Mayor and London Councils together re-convened the ‘London Housing Delivery Taskforce’ in August and September, bringing together the London housing industry to discuss solutions for the capital after experts warned of a major decline in housebuilding across the country. This has been driven by high interest rates, building cost inflation and a lack of leadership from the Government. [1]

Today, in a letter to Michael Gove, Secretary of State for Housing, the Mayor has warned of a lack of national leadership in this area and called for the Government to match his commitment to boost the supply of new homes and implement the Taskforce’s recommendations in order to avoid a serious downturn in housebuilding.

An industry-endorsed ‘joint position statement’ sets out the most critical challenges facing housing developers in the capital and some of the major interventions that both the Government and City Hall can take to rectify them.

The statement, endorsed by 26 key partners, including housing associations, local authorities, developers and industry body representatives, includes 29 recommendations for the Government to ensure the long-term viability of the capital’s housebuilding sector.

Among the proposals is a major boost to council homebuilding, which is needed to protect jobs and the wider construction sector supply chain. City Hall is pledging to take action to support social landlords by asking the Government to make access to centralised funding more straightforward and launch a new council homes acquisitions programme. However, the Taskforce warns that Ministers must also act: an immediate injection of grant funding combined with a new lower lending rate for councils could unlock the capacity for an additional 5,000 council homes in the capital.

Other measures Ministers are urged to take forward include scrapping the proposed new ‘Infrastructure Levy’ and removing the uncertainty caused by a lack of clarity on fire safety rules around second staircases on taller buildings, which are holding up developments.  

Adopting the Taskforce’s recommendations would build on the strong record of housing delivery during Sadiq’s mayoralty. London has completed more homes of all types in recent years than at any time since the 1930s and delivered higher council homebuilding than at any time since the 1970s.

Earlier this year, Sadiq celebrated meeting the hugely ambitious affordable homebuilding target of starting 116,000 homes, set under the Government’s 2016-23 Affordable Homes Programme, by March 2023. Nationally, Ministers have failed to meet their target, and Sadiq has called for unallocated funding to be given to London to spend.

The Mayor of London, Sadiq Khan, said: “Building the homes Londoners so desperately need has always been a top priority of me as Mayor. Since 2016, we have managed to get London building again, with record numbers of affordable homes being built. But we risk going backwards again due to the lack of national action.

“I share the frustration of many in the housebuilding sector who are infuriated by the lack of national leadership from Ministers.

“This new blueprint to maximise housebuilding in London, which has been established as a result of collaboration with the flagship London Housing Delivery Taskforce and London boroughs, sets out the action City Hall will take to build a better, fairer and more prosperous city for all Londoners, and the steps ministers must now take to safeguard the delivery of thousands of homes across the capital.

Sam Gurney, Regional Secretary of TUC, said: “Dealing with the housing crisis in London is a huge challenge that requires everyone to work together. The GLA housing taskforce is a good start to this. We need to see a step change in the provision of genuinely affordable, low cost, high quality social housing in our city, including support to allow local authorities to build council houses on the scale needed. We also need to ensure workers in the sector have decent conditions and access to the skills and training needed to build the environmentally sustainable homes we all need, including through the provision of quality apprenticeships. Unions across the capital are ready to engage with this work.” 

Fiona Fletcher-Smith, Chair of the G15 group of London’s leading housing associations, said: “Housing associations are facing very tough decisions in the face of high interest rates, cost inflation and wider uncertainty. We are prioritising investment in existing homes and services, but have had to slow down the development of much-needed new homes.

“We have to get the sector building again in order to meet the scale of today’s housing crisis, but without long-term thinking, certainty and political commitment that is just not possible.

“The recommendations set out today by the London Housing Delivery Taskforce would tackle many of the key issues holding us back. This would not only enable us to get building again and start addressing the chronic shortage of homes, but it would have a much wider economic boost for London and beyond.”

Jonathan Seagar, Director of Policy Delivery at BusinessLDN, said: “Housing starts in London are at worryingly low levels, with the lack of supply driving people out of the capital and acting as drag on the recruitment and retention needs of businesses. A combination of high interest rates, building cost inflation and regulatory uncertainty mean that developers are understandably increasingly selective over starting new projects.”

“During previous tough economic cycles, Government investment has been used to maintain development activity and help leverage in private sector investment. With London needing close to 5bn a year in affordable housing investment, if this cannot be provided centrally, the Government must devolve powers and funding streams to London government to allow it to make its own investment choices.”

Rob Perrins, Chief Executive of Berkeley Group, said:

“The taskforce is committed to increasing London’s housing delivery across all tenures and this will require radical thinking and a partnership approach from central government, the GLA, local authorities and developers. This has to include a collaborative effort to address the regulatory barriers that are driving capital investment out of London and preventing homebuilding projects from moving forward.  Homebuilding is a real force for good and we must act urgently to prevent London’s deeply damaging housing crisis from getting worse.”

Cllr Nesil Caliskan, Leader of Enfield Council, said: “Enfield’s residents have been acutely impacted by the current economic environment which has resulted in significant private sector rental price inflation and a 41% drop in available private rented accommodation since 2020. There has never been a time when accelerating housebuilding has been more needed. Enfield will continue to deliver, having invested considerable resources to bring forward important schemes for London such as Meridian Water as well as council housing building and regeneration schemes that tackle existing stock quality. But to meaningfully address the impact on housing and housing delivery caused by the current economic environment we urgently need the recommendations identified by this Taskforce to be acted upon by the government.” 

 

ENDS