The housing crisis could extinguish London’s growth

Over the last 30 years London has gone through a transformation.  Many areas have had a vital facelift, meaning that people have flocked to the capital with its promise of streets paved with gold in the form of business opportunities, great entertainment and culture. Hammersmith and Fulham estate agent, Lawsons and Daughters said; tourism is up, and London, far from being seen as the culinary desert it was 20 years ago, now has some of the finest eateries in the world and its British chefs leading the revolution.  However, London is in danger of being a victim of its own success.  The primary issue in London is its housing crisis.  We simply haven’t been building.

This is nothing new and particular government is to blame for the problem.  The issues have arisen due to poor policy by successive governments over a number of years. The lack of numbers has resulted in prices skyrocketing to the point where three bedroom terraced houses in west London are now worth over £2 million.  Great for the owner, not so great if you are trying to buy a house in the area. What’s more, it’s not just buying that’s a problem – most rents are also unaffordable with some equating to two thirds of a person’s income. All of this is a far cry from the 1970’s when renting took one quarter of your earnings.

In order to address this problem, London needs to build – and build quickly.  Current targets for house building in London are 42,000 annually but, sadly this comes up short by approximately 6,600.  It has been said that throughout the whole of the UK we need to build 200,000 per year a target that the government has consistently failed to reach by 80,000.  During London’s boom and bust era, some 58,000 houses were commissioned yet only 24,700 were actually built.  If we were to try to make up this shortage we would have to consistently build 62,000 annually for the next 10 years.

The unmitigated failure to deliver the planned houses required in London and a lack of a viable solution to combat the problem by each of the major parties has resulted in the current crisis. The problem presently is that in the capital the average family income is £35,700 but with current prices rises and more stringent mortgage tests if you want a home in London, buyers need to be earning £80,000 or more.

It is clear that urgent action is required.  The population of London continues to grow on a yearly basis and the lack of housing has resulted in serious overcrowding.  All parties have pledged to build more houses not just in London but up and down the country. But if you live in London and the southeast (a more popular area of the UK), you know that the process of buying a house isn’t as simple as just stumping up a deposit. With every house that goes on sale you know there will be serious completion, secret bids and gazumping.  Both Labour and The Conservatives have promised the required 200,000 houses per year, with the Lib Dems trumping that on 300,000.  But, by now the electorate is simply sick of all this talk and wishes they would stop bickering, come to a consensus and just start building; after all. It’s really only a numbers game.

 

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