Source: http://docplayer.net/1311838-Homes-for-london-the-london-housing-strategy.html
Timestamp: 2016-10-26 21:36:10
Document Index: 197075082

Matched Legal Cases: ['ART 1', 'ART 2', 'ART 3', 'ART 4', 'ART 1', 'art 1', 'ART 2', 'art 2']

⭐HOMES FOR LONDON THE LONDON HOUSING STRATEGY
HOMES FOR LONDON THE LONDON HOUSING STRATEGY
Download "HOMES FOR LONDON THE LONDON HOUSING STRATEGY"
1 HOMES FOR LONDON THE LONDON HOUSING STRATEGY DRAFT FOR LONDON ASSEMBLY April 20142 HOMES FOR LONDON: THE LONDON HOUSING STRATEGY 20143 HOMES FOR LONDON: THE LONDON HOUSING STRATEGY 2014 COPYRIGHT Greater London Authority March 2014 Published by Greater London Authority City Hall The Queen s Walk More London London SE1 2AA enquiries minicom Photographs Cover image courtesy of Bellway Homes Copies of this report are available from4 HOMES FOR LONDON: THE LONDON HOUSING STRATEGY 2014 CONTENTS CONTENTS 1 FOREWORD 2 EXECUTIVE SUMMARY 4 PART 1 IDENTIFYING THE CHALLENGE 6 Housing London s growing population 7 Supporting London s economy 12 PART 2 SETTING THE AMBITION 14 Increasing the supply of new homes 15 Improving design 20 Improving existing homes and estates 22 PART 3 FULFILLING THE COVENANT 25 Supporting working Londoners 26 Meeting a range of housing need 35 PART 4 DELIVERING THE VISION 43 Learning the lessons of the past 44 Financing housing delivery 45 Bringing forward land for development 51 Increasing development capacity 59 APPENDIX 1 Summary of policies 62 APPENDIX 2 Funding proposals 67 ENDNOTES 685 FOREWORD London is booming. Our economy is growing. The result-more jobs, more prosperity, and more people-puts even greater pressure on infrastructure, and in particular housing. Since 2008 London s population has increased by 600,000. By 2020 we will have nine million Londoners, by 2031 we are predicted to blast through the ten million barrier. My 2020 Vision set out the scale of the challenges we face in maintaining London s position as the best big city in the world. Rising to our housing challenge is an economic as well as a social imperative. 2 We need to help find every way possible for hard working Londoners to access decent low cost affordable housing at a time when for many it appears all that is on offer is ever more unaffordable. I published a draft housing strategy in November, setting out how I want London to rise to this challenge. It has had a tremendous response and every good idea has been included. While this housing strategy is not only about supply, it is clear that supply above all else is central to London s housing needs. With increased supply come opportunities to address affordability, help for people to meet their aspirations, improved quality, renewal of post-war estates, and the ability to tackle entrenched issues like homelessness and overcrowding. Post-recession London is seeing a vast expansion of house-building. A record number of new homes were registered to be built in 2013, while construction orders for new housing rose to 5.3 billion. Affordable house-building is on track to deliver 100,000 homes by 2016, a record in the history of City Hall. Yet the challenge is enormous, because historically the number of homes being built was too low. For the last 30 years or more, housing delivery has all but flatlined at around half the level we now need. Housing in the capital has been a story of boom then bust, of economic cycles that follow their inexorable cycle paths, of governments of all political colours that rise and fall but simply don t grip or change the fundamental story - we just do not build enough homes. This all leaves London facing an epic challenge: to double house-building and build 42,000 new homes a year, every year, for the next twenty years. That s a level of house-building unseen in our great city since the 1930s and then only for a few short years. And of course, unlike in the 1930s, we do not have the option of simply building over miles of virgin countryside. London has some of the most exciting development opportunities in the world. From Battersea to the Royal Docks, from Croydon to Brent Cross. As far as the eye can see the cranes that speak of the scale of opportunity in the capital dot the landscape. In truth we need more of them. We also have to ensure that the new homes we build are inspiring for current and future residents, that they are set in attractive neighbourhoods and vibrant town centres, and are well connected to jobs. There is massive neo-victorian investment now happening in London s transport system and we must make the most of this to underpin the delivery of new homes. My aim is to make sure that the homes we build better reward those who work hard to make this city a success by massively increasing opportunities for Londoners to own their homes through innovative new products, by improving the quality and management of the private rented sector, and by ensuring working Londoners have priority for low cost affordable homes to rent. I will also continue the groundbreaking work City Hall has done to tackle the needs of those most disadvantaged by the housing crisis, the homeless, rough sleepers and overcrowded households.6 This strategy aims to put in place the resources to deliver more than 42,000 homes a year. To achieve this aim, virtually doubling housing delivery, needs us all to recognise that this is not the job of someone else - not the boroughs, the Government, the Mayor, the private sector, or the public sector. It is the job of all of us and only by working together can we make this happen. So support me in making the case for a long-term financial settlement with national Government and for freeing up local councils to build. Support me in promoting institutional investment in new purpose built high quality private rented housing. Support me in bringing forward surplus public land and in developing the ten Housing Zones I envision across the capital to drive delivery. Support me in all these and we have the chance to build the homes we need. 37 EXECUTIVE SUMMARY 4 London s population is increasing, its economy is booming and by many measures it is the greatest city on earth. But with the city s remarkable success come challenges, one of the biggest of which is the massive shortfall of homes that most Londoners can afford. Addressing this is essential to ensure London s continued growth and the retention of its status as a pre-eminent global city. Meeting this challenge will not be done easily or quickly as it is a structural challenge that London faces, not a cyclical one. It requires a long-term plan, stretching over a number of Mayoral terms, economic cycles and spending rounds. It also requires a cross-party consensus on the importance of investing in housing, as there is to a much greater degree in other critical areas of provision such as health and education. Supply is picking up, even to the extent that brick shortages are now being experienced. NHBC figures identify that more homes were registered last year in London than at any point in the last 25 years, showing that the market has more than recovered to pre-recession levels. Roughly 25,000 new homes were built in each of the last two years and the Mayor is on track to deliver over 100,000 affordable homes over his two terms, the most delivered in the capital for decades. But this recovery still falls short of the Mayor s ambition. The shortage of housing pushes up prices and rents and there can be no doubt that London has an affordability crisis. It affects those in most acute need, whether homeless or overcrowded. Rising housing costs are also hitting working households on low and middle incomes the hardest. The economic case for providing adequate housing for those on modest incomes, who drive the London economy and therefore the national economy, is compelling. If these essential workers cannot afford to live in the capital, it impacts not just on London, but on the nation s economic growth and competitiveness. The overriding aims of this strategy are to increase the supply of housing of all tenures and to ensure that these homes better support London s continued economic success. The strategy is not just about supply; policies range from improving the existing stock to tackling rough sleeping but supply is at the heart of it, underpinning each of its five key priorities: increasing housing supply to levels not seen since the 1930s; better supporting working Londoners and helping more of them into home ownership; improving the private rented sector and promoting new purpose-built and well managed private rented housing; pushing for a new, long-term financial settlement for London Government to drive housing delivery; and bringing forward land for development and accelerating the pace of housing delivery through Housing Zones and the London Housing Bank. The strategy is designed to ensure that there should be homes for all those who are struggling to find somewhere decent and affordable to live in the capital. It focuses greater priority on working Londoners, improving their housing offer across all tenures. It increases opportunities for them to access low cost home ownership, it does more to support them as existing home owners, it improves their private rented options and gives them greater priority for affordable homes to rent. The strategy also looks to respond better to the housing needs of older Londoners, encouraging the development of more homes that are attractive and suitable for older people, while developing for the first time a tailored housing offer for younger people. It also maintains a focus on supporting those who are most disadvantaged by the housing crisis, the homeless and rough sleepers. It sets out a long-term ambition to increase supply to at least 42,000 new homes per annum, around double what has been achieved over the last 20 years. Of these, at least 17,000 should be affordable with 5,000 for purpose-built long-term market rent. In the investment round the Mayor will use the funding available to increase the delivery of affordable homes to 15,000 per annum. This will8 deliver 100,000 affordable homes over the Mayor s two terms and start building the future pipeline beyond 2016 when even higher levels will be needed to meet the longer-term aims of the strategy. 5 The affordable housing programme addresses the shortage of homes for low and middle income working households while continuing to provide homes for those in the most acute need, setting a mix for new affordable housing of 40 per cent low cost home ownership and 60 per cent rent. Half of the affordable homes to rent will be at lower capped rents, targeted at those most in need and half will be at discounted rents, no more than 80 per cent of market rents, prioritised for working households. The Mayor believes that all new homes should meet high design standards, with minimum space standards and should be designed to be accessible and adaptable for people at all stages of their lives. Improving the quality and energy efficiency of existing homes also remains a key priority. To achieve this, the Mayor will make funding available to ensure that all boroughs are able to reach the Decent Homes standard by 2016 and will encourage retrofitting for improved energy efficiency across all sectors. The strategy explicitly recognises the growing importance of the private rented sector, not only for groups who have traditionally been housed in that sector, such as young single people, but also for families with children. The new London Rental Standard promotes professional standards of management for landlords and letting agents, aiming to accredit 100,000 landlords by The Mayor will also work with boroughs to improve property conditions in the sector. The strategy also sets for the first time a target to increase the supply of new purpose built private rented sector housing, and the Mayor will work with institutional investors to support the delivery of these homes. The strategy reiterates the Mayor s priority to tackle overcrowding and the ambitious target to halve severe overcrowding in social rented housing by Alongside making funding available for larger homes, with at least four bedrooms, and a long-term commitment to deliver the family-sized affordable homes identified in the Strategic Housing Market Assessment, there is a stronger focus on freeing up more of the capital s existing family sized housing. The strategy will increase the provision of smaller affordable homes targeted at those downsizing, support purpose-built older people s housing and offer better incentives for older people to downsize. The Mayor will be monitoring and reporting on the success of these initiatives in freeing up larger homes. The strategy addresses the linked challenges of funding, land availability and development capacity that must be addressed to achieve the ambitious targets on increasing supply. It is clear that London needs a long-term and stable funding settlement for housing that transcends individual public spending rounds and enables the Mayor, boroughs and housing providers to plan ahead with certainty. The Mayor is seeking more flexibility in the rules governing GLA and borough borrowing for housing and is also working on a London Housing Bank to accelerate the pace of development. To provide the land for development the Mayor will have an exit strategy for all GLA landholdings by 2016, will seek a greater role in bringing forward surplus government land and will lobby government for additional funding to acquire land to drive housing delivery. Up to ten Housing Zones will be launched with innovative approaches to maximise the capacity of key sites to rapidly deliver new homes and the Mayor will promote at least three new garden suburbs. To ensure that London has a development industry that is capable of delivering more homes, the Mayor will encourage new entrants to the market and long-term investment to support covenanted, purposebuilt private rented homes that will accelerate the rate of building, especially on large multi-phase sites. The Mayor will also encourage development by small and medium-sized builders and community-led organisations, with non-developing housing associations encouraged to unlock their financial capacity to get building.9 6 PART 1 IDENTIFYING THE CHALLENGE Part 1 sets out the scale of the challenge. It describes the increased demand for homes driven by a growing population and changes in the patterns of tenure. It describes the impacts of insufficient supply undermining economic competitiveness, worsening housing affordability and increasing levels of acute housing need. It goes on to set out the economic case for housing as infrastructure that is essential to support London s growth, detailing the contribution that house building makes to GDP and to job creation. It identifies how a failure to provide adequate housing for low and middle income Londoners could have severe impacts for future economic growth.10 Housing London s growing population London s population boom By many measures, London is the greatest city on earth. It is the UK s only global city and Europe s most cosmopolitan capital. Between 1997 to 2012 London s economy more than doubled in size, growing from 147 billion to 309 billion. 1 Over the same period, its share of the UK s gross value added increased from 19.4 per cent to 22.4 per cent. This welcome growth comes at a price and London s infrastructure, including housing, is under tremendous pressure, both from indigenous population growth and from newcomers looking to share in the success of the capital. London s population has grown rapidly, from 6.8 million in 1986 to 8.4 million in 2013 and is now projected to surpass its 1939 peak of 8.6 million as early as This significant growth, after decades of falling population from the 1940s to the 1980s, is influenced by a number of factors, but primarily the natural growth that results from London s relatively youthful population. There has also been a fall in out-migration over the last ten years, with more people choosing to stay and raise families while in-migration has stayed more constant. 3 Although the population trend is clearly upwards, there is some uncertainty as to its long-term trajectory. This is in part because it is not yet clear whether the recovery of the housing market across the wider south east will lead to a resumption of historic levels of out-migration. The GLA s best estimates are that the population will reach nine million by 2020 and ten million by This is more than the equivalent of adding the population of the UK s second biggest city, Birmingham, or three new London boroughs the size of Croydon, every ten years. Figure 1: London s population is equal to these 24 cities 5 The current population of 8.4 million Londoners is formed into roughly 3.4 million households and this is projected to rise to around 4.2 million over the next 25 years, an annualised growth of around 40,000 households. 6 The main drivers are expected to be one-person households (projected to rise by 160,000 between 2011 and 2035) and couple households (projected to rise by 475,000). 711 While London s population has grown more over the last ten years than at any time in its two thousand year history, housing supply has not kept pace. Figure 8 below shows that annual new house-building has stayed around 20,000 to 25,000 over the last 30 years, all but untouched by successive periods of boom and bust. The mismatch between supply and demand has grown widely in the last decade and is reflected in the average household size in London increasing for the first time in over 100 years, from 2.35 in 2001 to 2.47 in Figure 2: Inner and outer London homes built by period 9 Annualised percentage growth 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2.0% 1.5% 1.0% 0.5% 0.0% Tokyo (Prefecture) Housing stock London (GLA area), Population Paris (centre and petite couronne) Outer London Inner London New York City Throughout the twentieth century, most new house building was in outer London. Figure 2 shows that 84 per cent of London s surviving homes built in the 1930s are in outer London, but outer London s contribution to new housing supply has fallen since and it accounts for just under half of the homes built since the millennium. The highest growth was in the first four decades of the twentieth century, with around half a million homes built in outer London between 1900 and 1929 and another half a million in the 1930s. By contrast, the twenty first century has seen slightly more homes built in inner London. 10 A rising population requires a significant and sustained increase in supply in both inner and outer parts of the capital. Even at the pre-recession peak, new supply was far below the estimated minimum 42,000 homes per annum that are now required. 1.2 A global challenge Figure 3: Annualised percentage growth in housing stock and population 11 Global cities around the world are all facing a massive challenge in providing enough new homes to meet the demands of growing populations. Over the last decade, London increased its housing stock at a much faster rate than Paris and New York, both of which also had lower rates of population growth. 12 However, London s stock grew at a much slower rate than Tokyo s, which increased by around two per cent per annum. 13 To achieve a similar rate of growth, London would need to build around 60,000 homes every year. It is also notable that Tokyo saw a substantial growth in owner occupation in this period. Tokyo s rapid housing growth is due to a number of factors including close integration of transport and housing development, alongside a more flexible planning regime that encourages greater development densities. 1412 1.3 London s housing sub-markets 9 London s housing market is complex and diverse and there is not a homogenous housing market within any single borough boundary. It contains a range of sub-markets which vary widely, not just by tenure and price, but by the type of purchaser and renter. The prime central London market has seen very rapid growth in demand, and consequently prices, since the depths of the last recession, with a high proportion of cash purchasers and overseas investors buying both new and existing homes. 15 The rest of inner London has also seen a strong growth in prices, again in part due to overseas investment, but to a far lesser extent than prime central London, and in part due to strong domestic demand from both home owners and landlords. 16 Finally, most of outer London is still predominantly a traditional mortgage-led market and has thus seen less price growth in recent years, though there is also rapid growth in renting in town centres and suburbs. 17 These markets overlap and affect each other; even if prime central London s property market can seem totally detached, displaced demand as a result of its high prices still affects the rest of the city. 1.4 London s affordability crisis Figure 4: Estimated London house price indices K&C and Westminster Other Inner London Outer London England & Wales Given London s status as a global city and its significance to the UK economy, it is unsurprising that land and property prices are higher than the national average. However, the scale of the gap, and the extent to which it is growing, is striking. In December 2013, the average house price in the capital was 450,000, compared with an England average of 260,000. Average prices in London have risen by twelve per cent in the last year, compared with six per cent nationally. Figure 4 shows that price growth has been fastest in the two most expensive boroughs (Westminster and Kensington and Chelsea), followed by the rest of Inner London, with comparatively slow growth in outer London, which is much closer to price trends in the rest of the country. 19 Rents are also higher in the capital, with the median monthly rent for a private rented home at 1,300, compared with a national average of Private sector tenants in London spend an average of 36 per cent of their gross household income on rent. 21 Figure 5: Ratio of London average house prices to UK average 22 As Figure 5 shows, average house prices in London are now 78 per cent higher than the UK average, the widest gap since at least the late 1960s. Over this entire period the gap has never been less than 20 per cent, but each house price cycle has left prices in London further away from UK prices than before13 It is estimated that overseas-based investors purchase in the region of ten to 15 per cent of new build homes in London as a whole, but this activity is highly concentrated in prime central London areas with UK residents buying over 90 per cent of new build homes in outer London. 23 As overseas investors are mainly focused on the new build market, they account for only around three per cent of total transactions and 6.5 per cent of total sales by value in London when sales of both new and second hand homes are included. 24 Prices across most of London s housing market are thus determined far more by domestic factors than overseas investment. 10 Overseas investment plays a vital role both in terms of retaining London s status as a global city and in financing construction. Such buyers tend to stimulate supply as they have a propensity to purchase off-plan, triggering development by providing vital pre-sales, without which projects are often unviable. 25 This is not a new phenomenon. It is estimated that the proportion of sales to overseas buyers in 2012 was much the same as in A related concern is that buy to let landlords may be crowding out first time buyers because of easier access to mortgages. Buy to let mortgages account for around 13 per cent of all outstanding mortgage debt in the UK and probably a significantly higher proportion in London given its relatively large rented sector. However, there is little evidence that buy to let lending is crowding out lending to first time buyers as the lending conditions for each are governed by very different rules. As with overseas investors, forward sales to buy to let investors are an important way for developers to reduce costs and risk, thereby supporting higher levels of housing supply. 1.5 London s changing tenure pattern Figure 6: Trend in household tenures 27 70% Population growth, limited supply of new homes and the consequent 60% affordability gap are causing profound Owner occupied shifts in patterns of tenure in the 50% capital. Fewer households are home 40% 30% owners or social tenants and far more Social rented are renting in the private sector. Owner occupation, which had been rising steadily for decades, flatlined in 20% the 1990s and has been declining 10% Private rented since There has been an even longer-term fall in the proportion of 0% social rented housing, notwithstanding growth in the stock of affordable homes over the last four years. These changes have resulted in the private rented sector growing significantly over recent years. It now houses 25 per cent of households, exceeding the number in social rent for the first time since the early 1970s. 28 On current trends, the proportion of owner occupation and private rent would be around the same at just under 40 per cent each by the mid-2020s. Proportion of all househlds Over 37 per cent of social sector households have dependent children, which is the highest percentage in any tenure and this has stayed fairly stable for many years. However, the proportion of private renting households with children has increased sharply, from 19 per cent to 29 per cent between 2001 and 2011, indicating a growing reliance on this sector by families. 2914 1.6 London s acute housing need There are significant challenges for those in the most acute housing need in the capital. After declining for several years, the number of households placed in temporary accommodation by London boroughs (see Figure 7) is increasing. Although low in historic terms, it is up by 14 per cent in the last three years. There has also been a twelve per cent rise in the use of bed and breakfast accommodation in the past year. 31 The number of people seen sleeping rough in the capital rose by 13 per cent between 2011/12 to 2012/13, although the increase is slowing and foreign Figure 7: Households in temporary accommodation 30 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Other, including social housing stock Leased from private sector nationals comprise most of the increase. But the overall numbers of people living on the streets is low, with 75 per cent of rough sleepers seen only once. 32 Hostels and women's refuges Bed and breakfast and shared annexes 11 Figure 8: Proportion of households in London overcrowded by tenure 33 Proportion of households overcrowded 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% Three year period ending Social rented Private rented All Owner occupied London has the highest rates of overcrowding in the country, with 255,000, or eight per cent, of all households lacking one or more bedrooms, compared to two per cent in the rest of England. This is up from five per cent at the end of the 1990s. Overcrowding rates are far higher in rented housing, with 14 per cent of social renting households and 13 per cent of private renting households overcrowded, compared to just three per cent of owner occupied households. Finally, an estimated 1.6 per cent of social renting households are severely overcrowded, that is, they lack two or more bedrooms. This estimate has fallen from 2.2 per cent in the last year. 34 A full assessment of London s housing markets, including condition and need, can be found in the GLA publication, Housing in London.15 Supporting London s economy Housing as essential infrastructure High quality infrastructure is fundamental for a city to function effectively. Public transport, roads and utilities are all essential for economic growth, and so is high quality and plentiful housing. Economic growth will be stunted without the necessary investment in transport networks, but a shortage of suitable homes for London s workforce is just as great a barrier to growth. London benefited from major improvements to its transport infrastructure in the last decade, and the network will be further enhanced when Crossrail opens in However, Crossrail is expected to be operating at capacity as soon as it opens, and Transport for London is forecasting increased overcrowding on both road and rail networks in the coming decades, adding to the already significant economic costs of congestion. 35 It is therefore essential to reduce the load on transport networks by building more homes close to where jobs are situated, or are likely to be created in the capital s growth areas. It is also important to focus housebuilding where population growth is projected, rather than in parts of the country where there is less demand. London is one of the most important business and financial centres in the world, with an economy nearly six times larger than that of Wales, two and a half times larger than Scotland s, and bigger than all but eight national European economies. 36 However, it risks losing its global competitive advantage as other international cities invest in their infrastructure. Like transport, housing needs a long-term funding settlement to enable a steady supply of homes, rather than the stop-start nature of recent investment rounds. Proposals for such a long-term settlement are discussed later in Part Building homes and creating jobs London s growth is important for the economic health of the whole country. London makes a net contribution to the national Exchequer of between 10 billion and 20 billion per annum. 37 House-building creates jobs directly in construction and the related supply chains that extend far beyond London s boundaries. Housing construction supports more jobs per pound invested than most other sectors because it sponsors a range of related activity such as concrete production, and glass and brick manufacturing. Construction-related activity is also very largely sourced from across the UK. Every new home built creates two jobs for at least a year, and house builders are significant providers of apprenticeships. 38 Every 1 of investment in construction is estimated to generate a total of 2.84 in total GDP. 39 Housing construction, repairs and maintenance have accounted for an average three per cent GDP in the last decade. Investment in affordable housing has additional benefits for the economy, often underpinning the delivery of market housing and thus creating more employment. The economic and social benefits of investment in affordable housing are greater in London than elsewhere, as affordable housing in the capital is used more intensively and the larger differential between its costs and private rents represents a bigger saving to the public purse from households claiming less in housing benefit. Developments in London also use less land per home, yet lever in more private funding to supplement the available public funding. 4016 1.9 Supporting London s skilled workforce 13 Based on historical trends, employment in London is projected to reach almost 5.8 million jobs by 2036, an increase of 860,000 from These jobs are forecast to be highly concentrated, with 280,000 of these new jobs being within the Central Activities Zone, already an area with one of the highest jobs densities in Europe. 41 This density of employment generates a range of benefits for firms and workers through what economists call agglomeration impacts. The benefits include a deeper pool of talent, better matching between skills and jobs, and spill over effects such as the rapid spread of knowledge and innovation. Agglomeration helps to explain why finance, creative and hi-tech industries all cluster in certain parts of London, driving growth in both employment and wages. The benefits of agglomeration can be maintained and enhanced with investment in transport and housing to increase the size of London s labour market. London s employment market provides an escalator effect for the whole country, enabling lifelong Londoners and newly arrived migrants alike to improve their skills and to increase their earnings at a faster rate than in any other part of the UK. 42 A healthy supply of new housing is a critically important part of this dynamic. If affordability worsens, London could be become a city of predominately higher earners. It is estimated that half of all employment growth between 2010 and 2020 in London will comprise professional, senior manager or associated professional and technical jobs, accounting for around 80 per cent of all earnings. Although these earnings are forecast to rise faster than average incomes, there could be a total shortfall of between 50,000 and 90,000 homes for professionals in London over the next ten years. Failure to provide homes for this group could have a seriously negative impact on London s economy, estimated at up to 35 billion over the decade. 43 The cost of owner occupation in some parts of the capital means that much of it is already accessible to only a minority of Londoners. 80 per cent of the new build sales market is affordable to only 20 per cent of working households, and the average first time buyer is now in the top 20 per cent of London s household income distribution. 44 If the increase in house prices continues to outpace the growth in wages, these disparities will become more extreme over the coming years. Research indicates that the greatest shortfalls in supply relative to demand are in the low to mid-priced segments of the market. 45 These trends suggest that there is a need to expand both the range of products delivered and the number of places where they are built. There is also a need to make the intermediate housing market more flexible to aid mobility for working Londoners. In addition to improving the mid-market offer, providing secure, high quality affordable housing to rent for those on the lowest incomes is also important. It reduces the demands on a range of public services, especially health care and social services and provides stability for future generations, improving educational and employment outcomes. Providing these homes within the capital enables low paid workers, who often deliver the services that support the London economy and make the city liveable, to live close to their jobs and so reduces travel costs and transport congestion. Investment in new homes with low rents for those who need them also represents better long-term value for taxpayers than meeting the high costs of market housing through housing benefit.17 PART 2 SETTING THE AMBITION 14 Part 2 identifies the number of new homes that are necessary to meet newly arising and backlog housing needs over the long term and the market and affordable housing proportions. It sets out the aims of the affordable housing programme and the design standards expected for these homes. It also identifies ambitions to improve the quality and energy efficiency of existing homes.18 Increasing the supply of new homes Delivering homes of all tenures Over the last ten years the overall level of new housing supply has averaged between 20,000 and 25,000 homes per annum. This is significantly more than over the preceding twenty years, but not nearly enough to meet London s housing needs. Over the Mayor s two terms, more than 100,000 new affordable homes to rent or buy will be built, providing good quality homes for around a quarter of a million Londoners, significantly more than any eight year period for some decades, but it is still insufficient to meet London s need for affordable housing. The Mayor will use his full range of powers to get more homes built in all sectors and this will involve new initiatives to secure additional finance, bring forward the land for development and build the industry capacity to deliver these homes as set out in part four of this strategy. 2.2 An ambitious long-term programme for London This strategy is fully consistent with, and should be read alongside, the policies in the Mayor's London Plan, and with the draft Further Alterations to the Plan published in January The London Plan sets out the Mayor's long term planning policies for London, and the draft Further Alterations amend the key housing policies in the London Plan to reflect new evidence on the requirement and capacity for new housing. The strategy sets out how the Mayor aims to deliver those homes and how the funding in the next investment round will be used to deliver these aims. The 2013 Strategic Housing Market Assessment (SHMA), published alongside the draft Further Alterations to the London Plan, provides the evidence of London's requirement for new housing of each tenure and size to It takes into account the population and household growth discussed above, the affordability of different tenures, and the backlog of housing need due to long-standing under-supply. The total backlog is estimated at around 349,000 households, but only around 121,000 of these require additions to the housing stock. The others need a different size or tenure of home, but will free up their own home for another household when they move. So these households affect the mix of homes required but not the total number. Taking all these factors into account, the SHMA identifies a requirement for around 48,800 new homes a year between 2014/15 and 2034/35, a significant increase on previous estimates of housing need, broken down by tenure and size in Table 1. Table 1: Annualised requirement for new homes, 2014/15 to 2034/35 1bed 2bed 3bed 4+bed Total % of total Market 2,798 5,791 8,545 6,083 23,217 48% Intermediate 3,357 2,240 2,506 1,799 9,902 20% Social rent 10,225 1,003 1,774 2,720 15,722 32% Total 16,381 9,034 12,825 10,602 48, % These figures assume that the backlog of housing need is fully cleared over twenty years, that all those needing affordable homes have their needs met and that overcrowding and homelessness are completely cleared. The SHMA also considers another set of results covering19 just the ten years 2014/15 to 2024/26 and assuming that the backlog is cleared by the end of that period. Under these assumptions the annual requirement would be for around 62,000 new homes, due in part to higher household growth in these early years and in part to reflect the assumption that the backlog is cleared twice as fast. 16 The Strategic Housing Land Availability Assessment (SHLAA), also published alongside the draft Further Alterations, sets out the evidence on London's capacity for new homes, based on an exhaustive survey of allocated and potential housing sites carried out with the London boroughs. Taking into account both larger sites (over 0.25 hectares) and the expected supply from smaller sites, it finds firm evidence of capacity for 42,000 new homes a year between 2015 and 2025 within existing London Plan policies and constraints. There is scope for delivering significantly more, up to the 49,000 SHMA need figure, particularly if the density of new schemes in Opportunity Areas and town centres can be increased. In summary, the evidence indicates that both London's housing requirements and its capacity for new homes have increased significantly, but that the need for new homes still significantly exceeds the capacity. Getting to 42,000 a year will be a huge challenge in itself, almost doubling current levels of supply, and this strategy sets out significant changes to existing models of housing finance and delivery to help meet that challenge. As shown in Table 1, around 25,600 or 52 per cent of the estimated annual housing requirement is for affordable homes, comprising 20 per cent intermediate homes and 32 per for affordable rent. However, the vast majority of new affordable homes in London are part funded by public subsidy and any affordable housing target must be deliverable in the light of plausible future subsidy levels. The draft Further Alterations therefore set a target for an average of 17,000 new affordable homes a year over the life of the London Plan, a level significantly higher than either the previous target or the average supply in recent years. If further housing capacity in London is identified then the affordable housing element of supply would also be expected to rise proportionately. For the investment round, this strategy sets a target of 45,000 affordable homes, a number determined partly by the level of funding that we know to be available and in the knowledge that overall levels of supply will take time to build-up. This represents an increase of approximately ten per cent compared to the investment round. 2.3 Delivering a better mix of homes As well as building at least 42,000 homes a year, it is essential to deliver homes suitable for those across the income spectrum. Given the SHMA identified a serious deficit in housing supply in the mid-market, there needs to be a better balance of housing products beyond the traditional split of homes for market sale and for social rent. This improved mix of products could also attract new providers and forms of finance to help to diversify and better balance London s housing market. Londoners in the highest income brackets are able to meet their housing aspirations without any state assistance. At the other end of the scale, social rented housing still accounts for nearly a quarter of all existing homes, a figure that rises to one third in inner London. 46 Yet just 1.3 per cent of London homes are low cost home ownership, despite this emerging as a highly relevant new tenure for those priced out of mainstream owner-occupation. 47 The evidence in the SHMA shows that this tenure is seriously under-supplied given the increasing pressures facing modestly paid households.20 The average first time buyer is now in the top 20 per cent of the household income distribution, with those on low and middle incomes struggling to afford new homes outside the rented sector. This latter group must be a greater priority in future funding plans. Home ownership has many benefits for the owner and for the wider community. It enables people to accumulate an asset which they can pass on to their children or use as equity during financial difficulties and avoids the state needing to meet housing costs after retirement, potentially an enormous burden in the decades ahead as more people live for longer. 17 The downward trend in owner occupation is therefore a concern. In response, the government has launched the two-part Help to Buy scheme: the new-build equity loan scheme that has been available since April 2013 and the mortgage guarantee scheme launched in October The scheme is open to both first time buyers and existing owners to buy homes valued at up to 600,000, and does not have an income limit for eligibility. This is helping to get more homes built and more households to buy, but there needs to be more support specifically for those on low to middle incomes. Building on the successful First Steps programme and the Mayor s commitment to help 50,000 Londoners over two terms, affordable housing investment in future programmes should shift towards a greater supply of low cost home ownership homes. While capital investment is critical to promoting the growth of intermediate housing, policy reform is also needed to create a more flexible market, as set out in section 3.2. Equally important is providing good quality homes to rent. To encourage the significant increase in the supply of new market homes that is needed, the Mayor will seek to ensure that private developers and registered providers build at least 5,000 long-term private rented homes a year. Any scheme of more than one phase should ideally build private rented homes that remain available in that sector for an extended period, preferably through a covenant mechanism that prevents them being sold. Local planning authorities are encouraged to take into account the impact on viability of such an approach for relevant planning applications. This strategy is the first to set a target for purpose-built rented homes as part of its target for 42,000 homes per annum as set out in section 2.3. Traditionally, affordable housing has not delivered a product explicitly designed for low income working households. While many middle income Londoners struggle to find a decent affordable home to rent in the open market, they do not necessarily need rents as heavily subsidised as target rents for social housing. Providing homes for these households, with rents set above target rent levels but below market rents defined here as discounted rents, will greatly reduce the subsidy needed for these homes and so get more homes built. Ensuring these homes are provided for low and middle income working households will give providers greater certainty over their viability and will provide a rented offer to complement the continued provision of low cost home ownership products. Alongside this approach, providing rented homes for those on very low incomes, particularly families who are reliant on benefit support, remains a priority. Given very high rents in the market sector, the Mayor will support the provision of homes at lower rents for this group defined here as capped rents. 2.4 The affordable housing programme Affordable housing includes affordable rented and intermediate housing, provided to specified eligible households whose needs are not met by the market. The current average annual household income of those who access affordable homes for rent is 12,000 and 37,000 for low cost home ownership products. 48 The Mayor s aim is to deliver a balanced programme that supports low paid working households who would otherwise face punitive costs in the private rented sector, as well as providing a View more
The Lyons Housing Review Mobilising across the nation to build the homes our children need Contents Foreword 3 Executive Summary 6 Roadmap for Delivery 11 Chapter 1 A housing crisis of our own making More information Getting our house in order: The impact of housing undersupply on London businesses
Getting our house in order: The impact of housing undersupply on London businesses May 2014 2 CONTENTS FOREWORD 3 1. EXECUTIVE SUMMARY 4 2. ECONOMIC IMPACTS OF HOUSING UNDERSUPPLY 7 REMUNERATION 8 RECRUITMENT More information Solutions for the housing shortage. How to build the 250,000 homes we need each year
Solutions for the housing shortage How to build the 250,000 homes we need each year Matt Griffith and Pete Jefferys July 2013 Contents Executive Summary 3 Investment Options......................................................... More information Construction 2020. A Strategy for a Renewed Construction Sector
Construction 2020 A Strategy for a Renewed Construction Sector May 2014 BAILE ÁTHA CLIATH ARNA FHOILSIÚ AG OIFIG AN tsoláthair Le ceannach díreach ó FOILSEACHÁIN RIALTAIS, 52 FAICHE STIABHNA, BAILE ÁTHA More information Building the homes we need
are housing associations ready for an ageing population? By Martin Wheatley The Genesis Narrative Genesis combines its social purpose helping our customers build better futures with a commercial approach More information Public Land, Public Good. Getting maximum value from public land and property. Alex Thomson and Peter Wilkes. www.localis.org.uk
Public Land, Public Good Getting maximum value from public land and property Alex Thomson and Peter Wilkes About Localis Who we are Localis is an independent think-tank, dedicated to issues related to More information City of Weyburn. Housing Need and Demand Assessment. Prepared By:
City of Weyburn Housing Need and Demand Assessment Prepared By: Table of Contents Executive Summary Section 1: Development Determinants and Housing Affordability Guidelines... 3 The Housing Continuum & More information More and Better Jobs. A Strategic Economic Plan for the North East. March 2014
More and Better Jobs A Strategic Economic Plan for the North East March 2014 Published April 2014 1 Creating more and better jobs The businesses and people in our area have delivered startling economic More information A BETTER PLAN FOR BRITAIN S PROSPERITY
A BETTER PLAN FOR BRITAIN S PROSPERITY CONTENTS A BETTER PLAN FOR BRITAIN S PROSPERITY 5 CHAPTER 1: THE CURRENT SITUATION: FAILURE ON GROWTH, LIVING STANDARDS AND THE DEFICIT 13 CHAPTER 2: THE ROOT OF More information LONDON INFRASTRUCTURE PLAN 2050 A CONSULTATION
LONDON INFRASTRUCTURE PLAN 2050 A CONSULTATION CONTENTS Mayor s Foreword Executive Summary A. LONDON S FIRST LONG-TERM INFRASTRUCTURE PLAN Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Introduction More information THE HOUSING WE D CHOOSE: a study for Perth and Peel
THE HOUSING WE D CHOOSE: a study for Perth and Peel Report May 2013 Commissioned by GOVERNMENT OF WESTERN AUSTRALIA Department of Housing Department of Planning Co-contributors / industry partners Research More information NO PLACE TO CALL HOME
REPORT NO PLACE TO CALL HOME THE SOCIAL IMPACTS OF HOUSING UNDERSUPPLY ON YOUNG PEOPLE Jenny Pennington with Dalia Ben-Galim and Graeme Cooke December 2012 IPPR 2012 Institute for Public Policy Research More information 78 Assist Homeless Individuals and Families. 80 Expand Supportive Housing. 82 Improve Housing Options for Seniors. 104 Notes.
Table of Contents Executive Summary 5 Introduction 14 Chapter 1: Fostering Diverse, Livable Neighborhoods 30 Pursue Affordable Housing and Community Development Opportunities in All Five Boroughs 34 Make More information Success through Skills - Transforming Futures
Success through Skills - Transforming Futures The Skills Strategy for Northern Ireland 2011 CONTENTS 1. Foreword 4 2. Executive summary 5 3. Introduction 9 4. The future economy and its skill needs 16 More information MORE JOBS, BETTER JOBS: BASELINE STUDY
JRF Programme Paper Cities, growth and poverty MORE JOBS, BETTER JOBS: BASELINE STUDY Nicky Denison, Les Newby and Victoria Gell November 2014 This paper: acts as a baseline to inform the More jobs, better More information Policy: report Bricks or benefits? Rebalancing housing investment
Policy: report Bricks or benefits? Rebalancing housing investment Foreword Back in 1966, housing was described in Cathy Come Home as the Cinderella of the Cinderella s of the welfare state and since then More information Modernising Annuities. A Consultative Document
Modernising Annuities A Consultative Document February 2002 February 2002 modernising annuities MODERNISING ANNUITIES a consultation document TABLE OF CONTENTS Chapter page about this consultation exercise More information Restoring Tasmania s energy advantage
Tasmanian Energy Strategy Department of State Growth Restoring Tasmania s energy advantage Ministerial foreword Restoring Tasmania s Energy Advantage I am very pleased to release the Tasmanian Energy Strategy More information Prosperity for all in the global economy - world class skills. Final Report
Choice for parents, the best start for children: a ten year strategy for childcare December 2004 Choice for parents, the best start for children: a ten year strategy for childcare December 2004 Crown More information The Commission on Funding of Care and Support CALL FOR EVIDENCE ON THE FUTURE FUNDING OF CARE AND SUPPORT. December 2010
The Commission on Funding of Care and Support CALL FOR EVIDENCE ON THE FUTURE FUNDING OF CARE AND SUPPORT December 2010 Published to the Commission s website, in electronic PDF format only. http://www.dilnotcommission.dh.gov.uk More information Securing Jobs for Your Future
Securing Jobs for Your Future Skills for Victoria MESSAGE FROM THE PREMIER AND THE MINISTER FOR SKILLS AND WORKFORCE PARTICIPATION Victoria s unprecedented prosperity over the past decade has been created More information The National Recovery Plan 2011-2014
The National Recovery Plan 2011-2014 BAILE ÁTHA CLIATH ARNA FHOILSIÚ AG OIFIG AN tsoláthair Le ceannach díreach ón OIFIG DHÍOLTA FOILSEACHÁN RIALTAIS, TEACH SUN ALLIANCE, SRÁID THEACH LAIGHEAN, BAILE ÁTHA More information EUROPEAN COMMISSION E U R O P E 2 0 2 0. A European strategy for smart, sustainable and inclusive growth
EUROPEAN COMMISSION E U R O P E 2 0 2 0 A European strategy for smart, sustainable and inclusive growth Preface 2010 must mark a new beginning. I want Europe to emerge stronger from the economic and financial More information i n pursuit of The Rt Hon the Lord Heseltine of Thenford CH
O STONE UNTURNED R O i n pursuit of W TH The Rt Hon the Lord Heseltine of Thenford CH Unless I can secure for the nation results similar to those which have followed the adoption of my policy in Birmingham More information A STRATEGY FOR FUTURE RETAIL
A STRATEGY FOR FUTURE RETAIL Industry and Government delivering in partnership OCTOBER 2013 A STRATEGY FOR FUTURE RETAIL INDUSTRY AND GOVERNMENT DELIVERING IN PARTNERSHIP Contents Introduction and Summary More information ENGINEERING OUR FUTURE STEPPING UP THE URGENCY ON STEM
ENGINEERING OUR FUTURE STEPPING UP THE URGENCY ON STEM Contents Foreword 3 Executive summary 4 1 STEM skills: vital for growth and higher living standards 6 2 Improving rates of progress on building our More information All Party Parliamentary Small Business Group
All Party Parliamentary Small Business Group An Inquiry into Productivity and Small Firms This is not an official publication of the House of Commons or the House of Lords it has not been approved by either More information The Help to Buy equity loan scheme
Report by the Comptroller and Auditor General Department for Communities and Local Government The Help to Buy equity loan scheme HC 1099 SESSION 2013-14 6 MARCH 2014 Our vision is to help the nation spend More information 2016 © DocPlayer.net Privacy Policy | Terms of Service | Feedback