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Fresh incentives needed to deliver more housing in capital – report

Words: Laura Edgar
London / Shutterstock_68997331

A new financial rewards system is recommended by a recent report to help increase housing delivery in London.

Carrots and Sticks: A targets and incentives approach to getting more homes built in London (pdf), co-authored by business group London First and Nathaniel Lichfield and Partners (NLP), argues that there needs to be a ‘carrot-and-stick approach’ to housing delivery in the capital.

It states that the ‘carrot’ would be increased financial benefits for boroughs that meet its targets, while the ‘stick’ would be “giving greater powers to the Mayor of London to intervene, should boroughs fail”.

The incentive would be the London Housing Delivery Bonus (LHDB), which would be in addition to the existing “but weak” New Homes Bonus.

The LHDB would be allocated by the Mayor of London, Boris Johnson, based on each borough’s performance compared with its housing targets.

The more the target is exceeded, the greater the reward for the borough, says the report.

The ‘stick’ would see Johnson receive powers to determine all planning applications for 50 homes or more for a set period of time for boroughs that “consistently underperform against their target”.

Johnson would have to justify this intervention against set criteria.

A spokesperson for London First said: “While we recognise that increasing house building is a complex issue and that many boroughs are proactively seeking to facilitate more development, the research concludes that London’s housing needs have become so acute that new incentives are needed to drive greater levels of delivery."

James Fennell, managing director of NLP added that, as well as these measures, "we also need for the capital to become a denser city, for surplus public land to be released for development, and for restrictions to be lifted so that local authorities are able to borrow against the value of their housing stock in order to finance new building projects."

The recommendations have been made following analysis by London First and NLP, also in the report, that show only 18 out of 33 local authorities met or exceeded their housing targets from 2010 to 2013, with London as a whole failing to meet targets outlined in the London Plan.

“The GLA’s most recent figures (pdf) show that 31,468 homes were delivered in 2013/14 against the 2011 London Plan target of 32,210,” says the report