LREF 2017: Government policy has “absolutely paralysed” London’s ability to meet the demands of a rapidly growing population, Jules Pipe, London’s deputy mayor for planning, regeneration and skills said this morning at the London Real Estate Forum.
Speaking at this morning’s keynote, chaired by EG editor Damian Wild, Pipe said the £1.4tn that the capital would need to invest in infrastructure to meet demand between now and 2050 was “highly reliant” on government grants.
There is a £175bn gap between what the transport and affordable housing sectors alone will need and what they will receive, he said.
“Under current arrangements, London’s ability to plan for its future is absolutely paralysed, with project approvals contingent on the decisions of others, not on those who have been elected to run London,” he said.
Pipe criticised the government for not including Crossrail 2, which he called an “absolutely transformative scheme”, in its manifesto. The project, he said, would help deliver an estimated 200,000 homes and jobs to the capital, which was growing by 70,000 residents every year.
Katy Warrick, head of London residential development research at Savills, followed Pipe’s keynote address, arguing that while London has delivered an increasing number of homes, it is still falling short of demand, particularly outside the city centre.
London delivered 41,000 new homes last year – nearly meeting the government’s target of 42,000 – according to Savills research. That number is likely to rise to 46,000 this year.
Warrick said: “That’s great. It’s exceeded the government’s target, but it’s still way short of what we need to be building to really affect the affordability of homes for Londoners.”
She added that not only is this failing to meet the estimated demand for 64,000 homes a year in London, a fall in starts means that the city will deliver 35,000 homes annually by 2021.
While there is a demand for 37,000 homes at either sub-market rent or for purchase at £450 per sq ft in the next four years, the supply coming on the market provides for only 9,800 homes.
By contrast, developers are oversupplying the upper end of the market – homes valued at £700-£1,500 per sq ft – with a pipeline of 15,500 for an occupier market that only needs 11,000 homes.
Warrick said: “We need to think about where Londoners can afford to rent and buy. We need to open up new parts of London.”
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