Why isn’t London building?
Affordable housing targets and well-meaning safety regulation has led developers to conclude that building in London is not worth the hassle, says Sam Griffiths
You’re probably bored of reading bad news about housing in London – but figures released by the Home Builders Federation (HBF) should make us all sit up and take notice. Only 30,000 homes were completed last year to June, which is just over a third of the government’s 88,000 annual target for the capital. New Housing Secretary Steve Reed, who is “absolutely committed” to the target, should be petrified that all indicators show completions will drop even further over the next year.
Be in no doubt that these figures mean we can expect housing to become even less affordable, renting to become even more competitive and waiting lists to lengthen even further. So what has caused this disaster, and what can be done to get the capital building again?
Jamming up the system at the moment is the Building Safety Regulator, a new institution that seemed like a good idea after Grenfell. In practice it has kept 10,000 homes waiting for over six months to get the green light to start building, simply because it is not equipped to deal with the reams of new detail architects must now provide before any bricks can be laid.
The Building Safety Regulator has kept 10,000 homes waiting for over six months to get the green light to start building, simply because it is not equipped to deal with the reams of new detail architects must now provide before any bricks can be laid
Additionally a new requirement for second staircases in tall residential buildings, even if they have already been approved, has sent plenty of projects in London back to the drawing board. A costly redesign and fresh planning process is usually needed, which future residents ultimately pay for through smaller and more expensive flats. All for a second staircase that the Grenfell Public Inquiry did not recommend, and has debatable safety benefits.
Perpetuating tragedy
Over-regulation is usually the offspring of best intentions and a sense that ‘something must be done’, which was natural after the Grenfell tragedy. However these counterproductive policies are now worsening the ongoing tragedy of London’s housing crisis, and keeping people in overcrowded and outdated homes while they wait for new ones to get built.
As for the Mayor of London, his target for 35 per cent affordable housing is now actively making housing more unaffordable. It’s hard enough to make a profit on private housing at the moment, let along anything that must be sold below market rate. You don’t need to be an economist to work out this populist policy only reduces supply and increases prices of mid-market homes.
The sum of all these well-meaning regulations is that most people have decided building in London is not worth the hassle. The Mayor and the government urgently need to start making big statements to attract investment back, and slash the regulations and requirements that have forced the golden goose to flee the nest.
Our current crop of politicians are far from the only culprits – supply has been too low and demand has been juiced for decades by generous tax breaks on property. Big developers have been having a tough time since interest rates shot up and Help to Buy wound down at roughly the same time. But a capital city building so few homes should provoke some self-reflection from our leaders, who need to drop the dogma and work to make London an attractive place to build again.
Sam Griffiths is an account director at Concilio Communications