London has opportunity to reverse housebuilding shortfall

London has opportunity to reverse decades of housebuilding shortfall

• Record number of planning applications gives London a shot at 50,000 homes target
• But challenge remains to convert applications into new front doors opening
• Fifty Thousand Homes campaign puts the ‘scores on the doors’ with detailed Ordnance Survey data

London has seen a record number of requests to build new homes in 2017, analysis from the Fifty Thousand Homes campaign revealed today.

Over 42,000 planning applications for housing have been submitted in the first six months of 2017, a 38% increase on the average rate since 2010 and the highest number of applications over this time¹, giving London an opportunity to reverse decades of failing to build the number of homes the capital needs.

But, with over one in three planning permissions falling by the wayside in 2016, London faces a huge challenge ahead to convert planning applications into new front doors opening.

Jasmine Whitbread, Chief Executive of London First who launched the business-backed Fifty Thousand Homes campaign, said: “There is an appetite to build in London, but we need the Mayor, boroughs and developers to step up and make that ambition a reality. Nobody expects London’s housing crisis to be solved overnight, but 2017 is an opportunity for local authorities to grant more permissions than ever before and for record breaking levels of construction to begin. We must unlock the housebuilding hold ups that are forcing so many Londoners out of our capital.”

The analysis, developed by Grant Thornton UK LLP who are part of the Fifty Thousand Homes campaign, found that London is currently building less than half the number of homes it needs, with construction over a full year peaking at 23,913 in 2015.

But, with over 15,000 new homes already completed in 2017 and previous years seeing more homes completed in H2, London has an opportunity to deliver a bumper year for housebuilding, both in terms of permissions granted and new front doors opening.

Central London appears to be building the overwhelming majority of properties, with boroughs in zones 1-3 building nearly 70% of all the capital’s new homes.

But unless boroughs in zones 5 and 6 dramatically step up the pace, they will miss the housing targets for 2017 set out in the Mayor’s London Plan by over 50%.

Ian Tasker, Director, Grant Thornton UK LLP, said: “We know there is a desperate need to boost housing supply across the capital and our analysis allows us to better understand the areas that hold the greatest opportunity but also the greatest challenge.

“The uplift in the first half of 2017, in both applications and permissions, is encouraging but there is still more to be done. London’s status as a leading global city relies heavily on businesses being able to attract local and global talent and we need to find new ways of working collaboratively to tackle the ongoing housing pressures they face. We have the appetite, we now need to focus on how we convert this into homes."

London needs 50,000 homes a year to help keep up with its growing population.

The Mayor has set out new planning rules to help speed up the building of more affordable housing and the government has committed £3.15bn to support new homes in the capital.

Public land is also being identified that can be used to deliver new housing and the Mayor is already fast-tracking 75 sites, across 300 acres of TfL land, that could deliver up to 10,000 new homes for Londoners.

But with net departures to places outside London totalling 93,000 in the year to mid-2016, up more than 80% from five years earlier², there has to be a dramatic and sustainable increase in the number of homes being built to protect and enhance the capital’s competitiveness as a global city.

Sources:

1. Number of housing applications in H1 by year (January-June)

2. Savills data, reported by the FT (‘House prices drive London exodus as buyers seek better value’, 24 July 2017)