Real estate calls for ‘balanced’ policy to unlock £100bn+ growth

The London Property Alliance has urged the new government to adopt a growth-oriented planning policy, estimating that 407,000 jobs and 55.7m sq ft of commercial floorspace could be unlocked in central London by 2045 – the equivalent of 39 new Shards, and worth £101bn to the economy. The trade body’s Good Growth for Central London report, produced with consultancy Arup, said a more development-friendly approach would reverse a fall of 54% between 2013 and 2024 in office planning applications in London’s important central activities zone, which generates £315bn a year for the UK economy – 11% of the country’s total economic output. The report highlights the benefits to growth brought by a “balanced” approach when compared with the status quo, as well as a more restrictive approach based on heritage preservation and targeted development. A balanced approach focused on flexible planning and growth policies, investment in local infrastructure and business support could deliver 50,700 new homes in the same period, whereas current policy would produce just 28,400. The LPA and Arup said the area is “the most sustainable location for jobs and economic activity”. Greenhouse gas emissions are measured at 0.6 tonnes of CO2 in the central activities zone, which is four times less than the rest of England and Wales. Charles Begley, chief executive of the LPA, said: “It is highly encouraging that the new government is putting planning reform at the heart of its agenda for growth. Our analysis lays bare the profound impact of planning decisions on growth, particularly in relation to attracting investment to ensure buildings are sustainable and fit for purpose.” Earlier LPA research showed the area raises £5.5bn a year through business rates, 80% of which is used to improve public services around the country. The balanced approach could deliver an additional £3bn in developer contributions to improvements to local streets and communities. In contrast, the report suggests that a more restrictive approach could render London less competitive than other global cities such as New York and Paris and generate just £7.6bn in growth, instead of £101.2bn. Matt Dillon, director and global economics skills leader at Arup, said: “Central London is a challenging area, with policies needed to encourage new, high-quality, sustainable development, as well as taking account of heritage assets and the needs of residents, but the prize in taking this balanced approach is huge.” Photo © Ismail Merad/Unsplash