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The Progressive Policy Think Tank

Mayor must now get a grip of London's housing crisis

Extra powers needed to boost capital's house-building, curb rising prices & rents

London's Mayor must make housing a policy priority, according to a new report, published today by the think tank IPPR. The report calls for new, decentralised powers over housing benefit for the London mayor as part of a rethink of welfare reform, along with tougher taxes on super-rich foreign buyers, to help fund the extra homes the capital needs.

IPPR analysis shows that by 2025 London faces a housing gap of 325,000 homes unless serious action is taken.

The report argues that London's housing crisis is unique because:

  • Average house purchase prices are 121 per cent higher in London than nationally (average house purchase prices in London recently rose to £345,298, up 2.8 per cent on the last year, and £138,766 more than in the next most expensive UK region).
  • The average cost of buying a home in London ranges from £212,166 in Barking and Dagenham to £967,951 in Kensington and Chelsea (full breakdown below).
  • Fewer Londoners can afford to own their own home (53 per cent of London households own, compared to 66 per cent nationally). The average age of first-time buyers in London is 43, five years older than the national average.
  • Buying is still cheaper than renting: the average private rent is £1,281 per month and exceeds £1,000 a month in 22 of London's 32 boroughs.


The report also shows that:

  • London has the most overcrowded households of any region, with 220,000 households living in overcrowded accommodation (up 65,000 over the last decade).
  • London accounts for the vast bulk of England's homelessness and temporary accommodation cases, with 75 per cent of England's households in temporary accommodation living in London.
  • Londoners move often: 10 per cent of households in London have moved within the last 12 months, with the most 'churn' in the private rented sector.


The report recommends:


Increasing the supply of housing in the capital by:

  • exploring new roles for Registered Social Landlords (RSLs) in the provision of new properties, including in the private rental sector; and,
  • releasing more public land for development - not even counting their many small sites, public authorities in London hold enough land for more than 234,000 new homes.


Improving London's welfare reforms by:

  • in the short term, raising the Local Housing Allowance (LHA) caps in London by £10 per week; and,
  • in the longer term, devolving power, resources and responsibility for housing, including housing benefit, to the mayor.


Achieving reasonable regulation of the private rented sector by:

  • forming a London Rent Stabilisation Board to check unreasonable rent rises; and,
  • starting an accreditation scheme to codify a new 'something for something' deal with landlords.


Increasing the taxation of foreign buyers of prime London property by:

  • pressing ahead with levying capital gains tax, inheritance tax and a new 'piggy bank tax' of 2 per cent a year on overseas buyers of London properties worth more than £2 million - a measure government is consulting on.


Andy Hull, Senior Research Fellow, said:


"London's housing crisis is a crisis of affordability, for buyers and renters alike. Without a major increase in housing supply, it is hard to see a way out.


"But London's housing problems were not created yesterday and will not be solved tomorrow. It will take many years to address the imbalances and inequalities which have built up over recent decades.


"London's sheer scale and its particular economics mean that national housing policies frequently do not fit with the reality of housing in London and have a distorted impact on those who live in the city. London's Mayor can use his office and its strategic role in relation to London's 32 boroughs in ways that would be unthinkable or unworkable elsewhere in the UK.


"London is facing a housing crisis exacerbated by the rest of the UK's reluctance to fund housing benefit costs in the capital. Families who find themselves living with a shortfall in their rent as a result of benefit changes are likely to struggle to find affordable alternatives because of the shortage and high cost of housing in London.


"The mayor should be able to determine how housing benefit is allocated across London and set the relevant limits in line with prevailing market and economic conditions. This would enable the mayor to adjust the current caps and remove the worst iniquities which he spoke out against during his campaign."


Notes to Editors


IPPR's new report - Affordable capital? Housing in London - is available in advance on request from the IPPR press office and will be available to download from:


The average price of a property in London is:

Kensington & Chelsea - £967,951

Westminster - £677,752

Camden - £578,803

Hammersmith & Fulham - £526,964

Islington £460,728

Richmond Upon Thames - £455,386

Wandsworth - £389,102

Hackney - £386,842

Southwark - £369,877

Barnet - £354294

Tower Hamlets - £347537

Lambeth - £348,437

Haringey - £341,146

Merton - £333,289

Ealing - £330,791

Brent - £319,931

Kingston Upon Thames - £319,582

Redbridge - £295,176

Harrow  - £291,403

Hounslow - £281,877

Bromley - £290,205

Lewisham - £271909

Greenwich - £257,338

Hillingdon - £260,980

Enfield - £261,322

Havering - £254,427

Croydon - £245,005

Sutton  - £244,659

Waltham Forest - £241,985

Bexley - £225,233

Newham - £221,228

Barking & Dagenham - £212,166




Tim Finch: 07595 920 899 /">


Tamsin Crimmens, 07800 742 262,">