In the last 10 years, the proportion of households who own their home with a mortgage has fallen from 39% to 27%, according to the interim report from the London Housing Commission, published by IPPR today.
House prices are now 44% above pre-crisis levels and the average deposit is over £70,000. Meanwhile rents continue to outstrip earnings with weekly pay increasing by 2% in the last 5 years while rents have grown by 16%.
The report shows that while London needs to build 500,000 houses over the next 10 years, in the last decade only 194,000 new homes have been built.
By 2030 1.5 million more people need to be housed, with the need for housing growing by 50 - 60,000 households a year. This is in stark contrast to the new supply of homes last year in London of just 26,000.
The interim report from the London Housing Commission sets out the challenges facing policymakers and housebuilders across London. Looking at a cross section of submissions from the call for evidence the report identifies the key priorities for the Commission’s final report, which will be published in March 2016.
The interim report further shows that:
- 50,000 households are living in temporary accommodation - including 78,000 children
- Only 28% of London land is developed and less than 10% of London land is used for homes
- Local planning departments across England have seen an average reduction in budgets of 40%
- London Boroughs in the 1970s used to build more than half of London’s homes – last year they built 280
- Public investment for new homes has fallen by some 60% per home between 2011-2015
In 2016 the London Housing Commission will bring forward a new strategy for the next mayor of London, including proposals to:
- Identify and release more land for the next London Plan
- Strengthen planning capacity and efficiency
- Increase building on large, stalled sites
- Unlock capacity across the whole development industry
- Provide stable and long-term investment for affordable housing
- Improve housing quality in the private rented sector, and lengthen tenancies in order to stabilise rents.
Lord Bob Kerslake, the Chair of London Housing Commission said:
“Make no mistake - the capital is in the midst of a housing crisis but it’s of a different order to any housing crisis London has experienced in the past. Decent housing and the idea of home ownership is becoming more and more out of reach of ordinary Londoners.
“As the London Housing Commission heard in the many responses to our recent call for evidence, businesses are being detrimentally affected, as current and potential employees are priced out of taking work in the capital; public services are struggling to recruit, and low-income households are being forced out of the city by rising rents and frozen entitlements. In short, the social and economic fabric of the city is being damaged by our dysfunctional housing market.
“These issues are not insurmountable; they can be fixed. But there is no silver bullet, no single initiative, that will do it.
“There needs to be a comprehensive strategy for addressing London’s housing crisis – and the Mayor cannot do it alone. The governance at present doesn't match the scale of change happening in London. Along with the Mayor, boroughs and industry doing all they can, the Government need to let London to find the right solution for London.”
Bill Davies, Senior Research Fellow at IPPR said: “London's housing problems are deep, but are not beyond repair. Other cities in the world are more densely populated, more affordable, and better able to deliver more homes. If they are serious about solving the crisis, the next mayor of London and the Westminster government will need to develop a comprehensive strategy to confront the challenges head-on. Left alone, the market will not deliver the homes the capital needs, and the capital and the UK will be worse off as a result.”
The final report of the London Housing Commission will be published in March 2016 and will set out detailed recommendations for the next Mayor of London.
Notes to editors
IPPR publishes the interim report from the London Housing Commission – Capital Failure: Understanding the roots of London’s housing
crisis-– will be available from Wednesday 30th
December from http://www.ippr.org/publications/capital-failure
The aim of the London Housing Commission is to consider the challenges facing the London housing market, and produce a clear programme of action to address the supply of new homes, affordability, and the quality of the private rented sector.
- Lord Bob Kerslake, former head of the UK Civil Service and DCLG (chair)
- Terrie Alafat, chief executive, Chartered Institute for Housing
- Mark Clare, former chief executive, Barratt Homes
- Professor Rebecca Tunstall, professor of housing, University of York
- Nick Walkley, chief executive, London Borough of Haringey
- Professor Christine M Whitehead, emeritus professor of housing economics, LSE
- Nationwide, Mears, Catalyst, Poplar Harca
The final report of the London Housing Commission will be launched in March 2016.