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How to build 50,000 homes

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During the Second World War, a London regional development plan laid out the vision for much of the infrastructure and housing that still serves our capital to this day. No successive plans have since matched the scale or ambition for the city, and as a consequence our competitiveness as a major global business hub is at risk.

Employers in all sectors are struggling to recruit entry level staff, as rapidly rising land and property prices freeze out those who keep our city running. At London First, we are calling for a successful and competitive capital, thriving on its ability to attract talent from home and abroad.

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We want a competitive capital where housing costs are not a barrier to coming to London to work and study.

The housing crisis is making it increasingly difficult for new talent to come here and for those already resident to stay, as average rents soar to £1,400 pcm. London’s population will reach 10 million by 2036. Population pressures will continue, with most increases coming from domestic growth, not immigration.

To keep up, we need to be building 50,000 homes each year. Building at this level is not unprecedented. Between 1930 and 1939 we built 61,000 new homes a year. London’s population peaked at an estimated 8.6 million in 1939.

But in 2015 only 24,620 homes were built. Compounding this, the Brexit vote is expected to have a negative impact on the contribution of homes from private builders, who by 2013 still weren’t building at the same rate of the pre-financial crisis peak of 2008.

CEBR estimates that because housing prices have easily outstripped inflation over the last ten years, the economy is missing out to the tune of almost £1.2bn a year as people are forced to spend money on housing costs that would otherwise have been spent on goods and services.

This added spending would have supported nearly 11,000 jobs in 2015 alone, had the cost of housing in London been more manageable. Three quarters of London businesses consider the capital’s housing supply and costs to be a significant risk to the capital’s economic growth.

Mayor Sadiq Khan recognised the housing crisis as a top priority during his campaign, and we welcomed the news last month that he’s established a Homes for Londoners Board to oversee delivery.

Through our Fifty Thousand Homes campaign, we are calling for new kinds of homes to be built, on newly released land in London. The campaign is a group of demand and supply side led businesses and employers, supported by civil society organisations.

We are incredibly grateful to our campaign partners Grosvenor, Atkins, Go-Ahead and RBS, as well as to our campaign knowledge partner Grant Thornton, for supporting the first year of the campaign.

Since its inception, we’ve secured excellent awareness for the campaign, pushed the Mayoral candidates to keep housing at the forefront of their own campaigns, and secured the support of housing charity Shelter – no mean feat. Now the Mayor has his feet firmly under the table, the campaign is growing in ambition and will focus on the delivery of new homes.

Together with our campaign partners we will:

  • Bring the energy and innovative discipline of business in to the housing crisis debate
  • Deliver, monitor and report on hard targets to the Mayor and Housing Minister
  • Push for the development of London’s wasted, unused public land
  • Call for us to build better – more homes, new suburbs, bolder building methods

To persuade government to act, it will be important for London’s employers to demonstrate how much they already do to support staff meeting their escalating housing costs. Next month we will launch our employer pledges, demonstrating what employers around the capital do to help staff, such as tenancy deposit schemes and flexible working.

While such commitment from employers is necessary, it is not sufficient. For business in London to continue to flourish we must build far greater numbers of homes for a growing workforce. Our goal is to get 50,000 new homes a year for London by 2020.

That is why we are collaborating with the London School of Economics and Grant Thornton, to produce a set of traffic lights that can be used to track government and City Hall performance on building the homes we need. We anticipate launching them later in the year, and reporting regularly on progress towards the target.

We will work side by side with the London Mayor and policy makers at City Hall and national government, exerting pressure as required to achieve 50,000 homes for London.

We hope you’ll join us.

Contact: Naomi Smith, nsmith@londonfirst.co.uk

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