London’s Housing Crisis

Posted on Monday, August 27, 2018 by Elly HannaNo comments

London has been seen for a long time as one of the most popular places to move to in the world for job opportunities and its vibrant cosmopolitan feel but is the housing crisis in London making it a less advantageous place to live?

As the average private rent now accounts for over a third of household income in London and homelessness and rough sleeping rises the capital appears to becoming a lot less attractive due to a shortage of attractive and affordable housing.  

The government is currently one of the main sources of income for private landlords with one in four families renting privately –– and an astonishing £24bn spent on housing benefit, hardly surprising considering the average rent in London is now £665.87 a week.

The last notable shortage of housing was the post WW2 era as a result of the blitz in London. This was tackled by massive government investment in housing resulting in 500,000 new flats having been added to London’s stock by the 1960s to ensure that an affordable family home was attainable to all in London. This resulted in a time of prosperity where the burden of unaffordable rent was relinquished from those on lower incomes.

But this flurry of building was reversed by the right to buy which resulted in 1 million houses being sold in 10 years. This is the same stock that is now either being privately rented or demolished to make way for unaffordable new private developments.

It has been estimated that London would need to build 66,000 new homes every year to meet its growing need and 65% of these new homes should be affordable. So how is this demand being met?

A number of the largest housing associations in London have now merged. One of the key reasons given for this is that their combined financial strength will mean they will be able to deliver more new homes. 

This has created its own problems with reports that this is actually leading to cleansing of poorer family’s from wealthy areas as properties are sold in the affluent areas to generate money to build a higher number of properties in cheaper areas. 

Shelter have recently reported that 55% of homeless families currently trapped in temporary accommodation are working and that this has come about by a combination of expensive private rents, the ongoing freeze in housing benefit and chronic lack of social housing which is definitely a key factor in London’s problems.

Ultimately what is needed is governmental investment in Housing. As it stands the government has pledged to invest £5 billion as part of The Housing Infrastructure Fund, but will this be enough?

The Mayor of London, Sadiq Khan has a vision for his London Housing Strategy to be delivered by 2022. His five key priorities focus on:

  • Building homes for Londoners
  • Delivering genuinely affordable homes
  • High quality homes and inclusive neighbourhoods
  • A fairer deal for private renters and leaseholders
  • Tackling homelessness and helping rough sleepers

This vision is backed by £1.67bn of this £5 billion fund and intends to build 10,000 new homes to try and tackle the effects of right to buy. With the housing market currently stagnating in London this vision has the potential of starting the process of ensuring a more affordable London for all.

A more affordable housing market is undoubtedly the corner stone to tackling London’s homelessness and social cleansing. The much needed investment being injected into the housing market has proven in the past to result in a fairer society. Hopefully the 5 year plan the government has outlined will result in London once again being the vibrant, cosmopolitan city affordable to the plenty and not just the few, but only time will tell.

 Jo Goodwill, Associate Director- Public Sector, London

 

 

 
Previous PostNext Post

No comments on "London’s Housing Crisis"