London Mayor’s approach to housing is unrealistic

31 May, 2019

London Mayor’s approach to housing is unrealistic

The Home Builders Federation (HBF) has grave reservations about the Mayor’s London Plan and its ability to deliver 66,000 homes each year up to 2029. It warns that the new Plan for housing does not properly identify the land to build on. Instead it relies on an overly theoretical approach to future housing land supply. The HBF warns that the capital will miss out on a huge economic boost and there will be significant social implications if realistic planning policies are not in place for housing.

HBF is urging the Mayor to withdraw his new Draft London Plan to avoid the potential for a grievous shortfall in housing accumulating in London. Instead he should prepare a new London Plan which explores how the capital’s considerable housing needs can be accommodated in new or expanded settlements within the wider south east of England. Meeting future projected housing needs over the next decade depends on some 25,000 homes a year being built on land which has not yet been identified.

The HBF is concerned that the Draft London Plan does not provide enough certainty that the land required to build the homes needed will come forward in sufficient quantity and in enough time to provide 66,000 homes a year.

A new report released today, based on research carried out by Lichfields for HBF, shows the huge contribution that house building is making to the Greater London economy1. Over 33,000 new homes were provided in the region over the last year, generating over £5 billion to the local economy. Whilst this is an increase on 22,000 being built seven years ago, it is still woefully short of the 66,000 homes a year it is estimated London needs for the next 10 years. If the Mayor puts in place a more robust plan for how the industry can deliver these homes, then, as well as providing the homes the capital desperately needs to house its growing population, the London economy could see a boost of £100 billion.

As well as being a major employer and supporter of local supply chain businesses, new developments make significant contributions towards local infrastructure and amenities through development taxes.

The report shows that in 2017/18, house building in Greater London was responsible for:

  • Supporting over 104,000 local jobs
  • Delivering over £5.5 billion of economic activity
  • Generating over £400 million of tax, the equivalent of employing approximately 15,972 new police constables2 or 16,132 registered nurses3
  • Delivering over £27 million of spending on new and improved schools, the equivalent of employing 918 additional teachers4 in inner London, or funding 5,796 additional primary school places5
  • An investment of over £10 million in open spaces, the equivalent of 670 ‘pocket parks’6

The growth over the past year was led by Ealing, which saw a 66% increase compared to the previous year. This was followed by Hounslow with 61%.

The report also underlines the growing impact the Government’s Help to Buy scheme is having in the region. Over 15,000 properties have been purchased using the scheme across Greater London since its launch in 2013, with 95%7 of those purchases coming from first time buyers.

Since the scheme launched, home building has increased by 47% in Greater London. Greenwich delivered a massive 1541% increase in housing over this period, followed by 456% in Kensington and Chelsea, and 297% in the City of London respectively.

Over this five-year period, housebuilding in Greater London has generated £1.8 billion in economic activity and £130 million extra tax.

Stewart Baseley, Executive Chairman at the Home Builders Federation, said;

“The capital has an acute housing crisis and the industry is committed to working with the Mayor to solve it. But the Mayor has to produce a realistic and deliverable plan for how we deliver the homes that London needs. Whilst housing supply is up, we are delivering nowhere near the number of homes needed. This is having an increasingly significant social impact, but also means the capital is missing out on billions of pounds worth of investment in infrastructure and jobs.

As we build the homes that London desperately needs we are also providing a huge boost to the economy. House building is supporting tens of thousands of skilled jobs as well as providing much-needed additional funding for local schools and community facilities. The industry is keen to work with the Mayor and other stakeholders on developing a plan that will enable the capital to reap the benefits of the new homes it needs.”

Housing is inextricably linked to the wider health of the economy and it is often referred to as a key barometer of national economic performance. But it is also important to recognise that it also has a range of significant effects on economic performance at regional and local levels too. In particular, house building:

  • Drives regional economic growth through its vast and varied supply chains and contracting relationships;
  • Generates unrivalled investment multiplier effects with very little import leakage due to the extensive use of local and regional suppliers and services;
  • Delivers real jobs both on-site and off-site in associated trades, such as cement production and brick manufacturing, as well as in research and development fields looking at technological innovation areas such as Modern Methods of Construction;
  • Creates economic value through new residents as they spend money on goods and services in the local economy;
  • Supports labour market mobility wellbeing by enabling local people to move jobs freely and achieve their economic potential;
  • Enhances “place competitiveness” and local economic development by improving the perceived competitiveness of specific locations and reducing the costs of mitigating social and environmental problems associated with poor or insufficient housing.

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For media enquiries, or to arrange an interview, please contact Claire Coward on 020 7960 1614 or 077 3268 2114. claire.coward@hbf.co.uk      

Notes to editors 

  1. For the purposes of this report, Greater London encompasses the boroughs of: Barking and Dagenham, Barnet, Bexley, Brent, Bromley, Camden, City of London, Croydon, Ealing, Enfield, Greenwich, Hackney, Hammersmith and Fulham, Haringey, Harrow, Havering, Hillingdon, Hounslow, Islington, Kensington and Chelsea, Kingston upon Thames, Lambeth, Lewisham, Merton, Newham, Redbridge, Richmond upon Thames, Southwark, Sutton, Tower Hamlets, Waltham Forest, Wandsworth, Westminster
  2. Metfriendly, Current police pay rates 2018/19 (based on paypoint 1, annual salary plus London weighting)
  3. Average Registered Nurse Salary in London, England
  4. Prospects, How much do teachers get paid? July 2018
  5. BBC News, Seven charts on the £73,000 cost of educating a child, 19 November 2018
  6. Ministry of Housing, Communities and Local Government, Green light given to over 80 pocket parks, 15 February 2016
  7. Ministry of Housing, Communities and Local Government, Help to Buy (equity loan scheme) statistics: April 2013 to 30 September 2018, 26 February 2019
  8. The Home Builders Federation (HBF) is the representative body of the home building industry in England and Wales. The HBF’s member firms account for some 80% of all new homes built in England and Wales in any one year, and include companies of all sizes, ranging from multi-national, household names through regionally based businesses to small local companies: hbf.co.uk

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claire coward
Home Builders Federation
Campaigns & Communications Officer