In fact, the issue is a lot more complex – and so are the solutions. However, data on increased housing starts from a range of sources suggests that we may at long last be heading in the right direction.
With the capital set to be home to more than 10m people by the mid 2030s, the mayor’s recently updated London Plan, the capital’s planning bible, is designed to meet the capital’s need for 49,000 new homes a year without encroaching on the green belt.
Overall, London has already approved capacity for 240,000 homes and on average over the last decade 58,000 new dwellings a year have been given consent. The supply-side policies in the new plan have been strengthened and should increase capacity. A big part of the housing shortage problem is translating these approvals into completions – these have only averaged 25,000 a year.
Not all of these new homes will be built by the mayor, so his power is limited. But he is making a difference when it comes to affordable housing. There will be 100,000 low-cost homes delivered over his two terms, with more than 94,000 already built. In the last financial year, 17,914 affordable homes were delivered in the capital, the equivalent of one every half an hour. This is the highest since government records began 24 years ago and we believe it is the most built in any year since 1981.
And the mayor continues to stimulate building through pioneering new policies, including increasing targets by a third, accelerating supply through 20 housing zones and a housing bank providing loan funding.
Preparing the pitch
In many ways, the mayor’s role in housing can be compared to that of a groundsman of a Premier League football team. It is the mayor’s responsibility to create the conditions that allow the housing and construction sectors to thrive, and to ensure that Londoners benefit from this. In other words, he prepares the pitch so it is in pristine condition for the players on match day.
Recent analysis from the mayor’s office on the barriers to housing delivery in the capital has revealed that only 50% of homes with planning permission are currently being built. This often has more to do with factors outside the planning system. In the past a lack of development finance was a particular problem, and there are still issues with capacity, whether it be skills, materials or the number of site owners who actually build. Market absorption rates on individual sites can also be a constraint on delivery.
But there is still scope to make planning more efficient. By digging down into the statistics we have revealed that in July 2014 there were 766 schemes for more than 20 private units where work had yet to start. For 96 of these schemes the reason for the lack of progress was an unsigned section 106 obligation. These 766 planning approvals totalled more than 105,000 new homes, of which more than 15,500 were in the schemes with an unsigned s106.
Improving the negotiation of s106 obligations would make a small but important contribution to improving delivery. Performance in London could be improved by giving the mayor a bigger role in the s106 negotiation process.
The mayor has a track record of delivering planning consents in a timely and efficient manner and believes that the system could be amended to give developers the option of having a s106 obligation for major schemes determined by the mayor if a 16-week period has elapsed since the local planning authority resolved to grant permission.
The mayor already has powers to intervene in the planning process and he automatically receives sign-off on all schemes of more than 150 homes. We are currently talking to government about changing the system so that any scheme of more than 50 homes that a borough has failed to determine within 16 weeks would automatically be referred to the mayor.
Housing is one of the capital’s most pressing needs, but this is not something that the mayor can do alone. It requires government, local authorities, developers, housing associations and land owners to all work together.
By making these simple changes to the planning system, we would be able to speed up the process and deliver the additional housing our city desperately needs.
Sir Edward Lister, chief of staff and deputy mayor of London for planning
