Log in | Register

Think tank demands higher subsidies to tackle London housing crisis

Words: Huw Morris

The unaffordability of London’s housing has never been greater, leading to increased overcrowding and homelessness with serious consequences for the capital’s economic competitiveness, according to a think tank.

In a new report, Priced Out: The Affordability Crisis in London, the Institute for Public Policy Research (IPPR) says the crisis is forcing higher costs on to the public purse through rising housing benefit and pushing out low to middle income earners. This is leaving businesses struggling to recruit and retain staff.

Housing delivery is falling well short of need, with only 31,125 homes built each year between 2004 and 2016 while the annual minimum target is 42,000 homes.

Meanwhile, delivery of net additional affordable housing was 50 per cent below target between 2013 and 2016, according to the report.

The IPPR said some affordable housing products do not meet their specified aims, claiming a household living in a Rent to Buy home would not be able to save for a sufficient deposit to buy a home in any borough.

The think tank praises London mayor Sadiq Khan for committing to a long-term strategic aim for 50 per cent of new homes to be affordable and for introducing lower benchmark rents, as well as a new intermediate product through the London Living Rent.

However, it calls on the government to raise capital subsidies to the London mayor to increase affordable housing output. This should be followed in the medium-to-long-term by devolving additional powers, allowing the mayor to set and retain property taxes.

Download Priced out: The Affordability Crisis in London (pdf)

Image credit | iStock