Property pledges
Boris Johnson, Conservative
• 55,000 affordable homes to be delivered by 2015
• £108m fund to unlock stalled developments
• £15m investment to bring empty homes into use
• £221m fund to transform high streets
Ken Livingstone, Labour
• Wants 35,000 new homes built in the capital annually
• Release GLA land to housing associations and developers
• Block developments that remove affordable housing without replacement
• Encourage pension trusts to invest in affordable housing
Jenny Jones, Green
• 15,000 affordable houses to be delivered every year
• Creation of London mutual housing company to build and restore vacant buildings
• Reform the private sector to reduce housing rents
• All social homes to meet a new decent homes green standard by 2016
SiobHan Benita, Independent
• Target derelict buildings for new housing
• More developments on GLA land
• Introduce a private-sector property MOT to improve standards for tenants
Brian Paddick, Liberal Democrat
• 360,000 homes to be delivered over 10 years
• 50% of new developments to be affordable
• 40,000 homes to be created from vacant spaces above shops
• “Living rent” standard to ensure rents do not exceed one-third of a tenant’s income
With the manifestos of all five main contenders for the 3 May London mayoral race now published, developers, housebuilders and landlords are looking at how candidates’ platforms would affect their businesses.
Current mayor, Conservative Boris Johnson, and his rival, Labour’s Ken Livingstone, both have ambitious plans to deliver affordable homes, with the latter keen to enforce tough planning regulations that ensure a cap on high private residential price tags, and favour more social housing. The Green Party candidate proposes 15,000 affordable homes a year, while the Liberal Democrats and the independent candidate want to see derelict and vacant buildings transformed into housing.
Simon Baynham, property director at Howard de Walden Estate, which has 750 flats in the capital, says that while pledges for new houses are welcome, he is not convinced housebuilders will be able to deliver the targets.
“Neither Johnson nor Livingstone say anything that really encourages me,” says Baynham, “and a lot of what they are promising is window dressing.”
He also raises concerns over plans from LibDem hopeful Brian Paddick and Green candidate Jenny Jones to implement rent caps on private properties.
“The government has made the mistake of interfering with private rents in the past and it deters landlords from letting, which could deepen the housing shortage. If a reform was enforced, it could destroy the private residential sector,” he says.
Dominic Grace, head of London residential development at Savills, says: “The targets for new homes look good on paper, but with demands for a large proportion of affordable housing, where will developers get funding?”
Grace adds that research by Savills shows that Johnson has failed to meet targets of 28,000-30,000 new homes annually since 2009, with a shortfall of more than 10,000 homes in 2010-11.
Labour, like the LibDems, wants no tenant to spend more than a third of their income on rent. But some estate agents say strict control will put landlords off leasing their properties.
Sam Mitchell, regional managing director of You Move, said: “I am always wary when we start seeing candidates make glib protestations, such as ‘give private tenants more stability, and stabilise rent levels’. It is this sort of talk that scares landlords away rather than encourages them to invest in housing.
“We need more housing stock if rents are to come down, not less. Protectionism will not work. We need policies that either encourage business to add to the housing stock or make it easier for landlords to let out their property.”
Liz Peace, chief executive of the British Property Federation, warns: “Another constraint on housing delivery will be the increasing contributions demanded of developers through the planning system.
“We would urge candidates to ensure that community infrastructure levy and affordable housing charges are kept at a sensible level that does not make new schemes unviable.”
In his manifesto, Johnson claims: “I have started to transform great swathes of the capital through the regeneration of the Royal Docks and the Battersea and Nine Elms area, securing new funding to drive even more growth.”
But these projects have to be viable for the investor, say sources. They say Johnson should not forget that less than two years ago the London Development Agency reached an out-of-court settlement to terminate its development agreement with its former partner on the £1.5bn Silvertown Quays scheme, demonstrating that such large schemes are rarely plain sailing.
What seems most important for the industry, however, is that whoever wins, the man (or woman) in charge of running London makes planning and housebuilding easier, allowing the real estate sector to improve margins and continue on its road to recovery.
joanna.bourke@estatesgazette.com
