Lyons review reflects change in political mindset over housing crisisOctober 16, 2014
London First has made its initial response to a housing report published by former BBC Trust chairman Sir Michael Lyons and commissioned by Labour Party leader Ed Miliband.
Lyons’ assertions that a lack of house building is damaging the prospects for economic growth reflects our recent research, Moving Out, which uncovered a serious threat of ‘brain drain’ as employees threatened to quit the capital over housing costs.
The research is part of our campaign to dramatically raise housebuilding in the capital, where the UK’s housing shortage is at its most acute.
Jonathan Seager, Head of Housing Policy at London First, said Lyons’ call for Government commitments to build at least 200,000 homes a year by 2020 showed that housing had shot up the political agenda, with all the main parties having now laid out plans detailing big boosts to housebuilding.
“This is what happened in the 1950s, when politicians vied to see who could promise the most homes to the electorate,” he said.
“That led to decades of impressive levels of house building that we have singularily failed to emulate recently.
“These promises, with big numbers attached, reflect a change in mindset from our leaders: they want to show the public how serious they are about solving this crisis. Now we need politicians to show leadership to see this through.
“We particularly welcome Lyons’ recognition that councils could build more new homes if they were given greater borrowing powers.
“We need politicians to realise that if councils are allowed to borrow in a prudent way to invest in housing, then that allows them to invest in an asset that will grow in value and give a regular income stream. This is not about irresponsible or unsustainable borrowing.
“We also welcome the call for more quality homes for market rent.
“There is an obsession in the UK about ownership; we need to think about how we professionalise the buy-to-rent sector, bringing in big investors to dramatically increase supply.”
Workers could quit London in their droves in the future as many struggle to pay rocketing housing costs, according to the research commissioned by London First.
The most comprehensive polling to date on the economic consequences of London’s housing shortage has raised serious fears for the city’s future if housing shortages aren’t addressed.
This threat is reflected by London’s businesses, with three-quarters of those surveyed warning the capital’s housing supply and costs are “a significant risk to the capital’s economic growth”.
For Moving Out, London employees, employers, councillors and members of the public were polled by YouGov on behalf of London First and global construction consultancy Turner & Townsend.
Headlines from the research include:
– A majority of employees (56%) find it difficult to pay rent or mortgages costs and work in London;
– The 25-39 age employee group is hardest hit in comparison with other age groups with 70% saying they find the cost of their rent or mortgage makes it difficult to work in London.
– Two of out five of them (41%) would currently consider quitting the capital to work elsewhere due to mortgage or rent costs;
– That number rises to almost a half (49%) in the coming years if prices keep going up as they have done;
– Only when employees are earning over £70,000 does the proportion who find it easy to service mortgages and rents outnumber those who find it difficult;
– Three quarters of businesses polled warned London’s housing supply and costs are “a significant risk to the capital’s economic growth”
– Two out of five (38%) businesses already say they are concerned about the impact that London’s housing supply and costs are having on their ability to recruit and retain staff.