Alarm bells ring over London housing crisis

Prominent figures from business, culture and academia want the government to address the growing housing crisis in London. 

A so-called Growth Commission – chaired by Helen Gordon, chief executive of Build To Rent giant Grainger – says London’s housing crisis as the key issue that is stalling growth across the UK. 

The Commission’s housing recommendations include:

• accelerating housebuilding through targeted, short-term support to bolster demand including a new Help-to-Buy scheme and temporary stamp duty reductions for first-time buyers;

• pausing and reviewing the introduction of a new Building Safety Levy to avoid jeopardising delivery by making it less viable to build;

• driving further improvement in the performance of the Building Safety Regulator to reduce bottlenecks to delivery;

• and extending the emergency measures for London until market conditions have improved significantly and ensuring they have a catalytic impact – for example, by fast-tracking planning. 

In particular, there’s also a call to make it easier for Build to Rent schemes to access grant funding under new emergency measures. 

Helen Gordon says: “Our recommendations deliberately focus on what business leaders know will make a real difference quickly, including by tackling London’s housing crisis. Implementing these practical solutions would help break the shackles that are holding the city back and get the economy out of the slow lane.”

The Commission’s recommendations highlight steps that can be delivered now through policy change with no additional public spending, medium-term measures that may require some legislative change but again entail no extra cost, and long-term asks that will involve some fiscal investment but would deliver significant payback and unblock growth.

It claims the following short-term measures can be actioned now, purely requiring a policy change and within the existing spending envelope:

• Delegate full sign-off authority for London’s Social and Affordable Homes  programme allocations to the Greater London Authority to speed up delivery;

• Ensure the revised London Plan goes further to encourage the additional contribution that both small sites and densification of suburbs could make towards increasing London’s housing supply;

• Reduce the Stamp Duty Land Tax surcharge for domestic and international purchasers;

In the medium-term it is calling for the following measures that may require some legislative change but can be done within the existing spending envelope:

• Automatically reimburse planning applicants’ reasonable costs following a successful appeal;

• Accelerate implementation of existing government budget commitments to strengthen planning services within local planning authorities and improve capacity;

• Introduce a new class of Permitted Development Rights (PDR) for temporary accommodation, to support faster and smoother delivery of urgently needed homes; and

• Adapt legislation to enable housing-led projects over a certain number of units and tenure mix the option to be treated as a Nationally Significant Infrastructure Project.

Its long-term recommendations includes measures that require some upfront fiscal investment, but have demonstrable and substantial payback and unblock growth:

• Allow full expensing of build costs on brownfield housing delivery; and

• Embrace more Tax Increment Financing style funding to provide the upfront infrastructure investment that can unlock further housing development.

It calls for a reversal of the decision to abolish the ‘non-dom’ tax regime to reverse the exodus of high-net worth individuals from London, remove international students from net migration figures to avoid it becoming an annual flashpoint; and establish a new Office for Tax Competitiveness to identify where the UK’s appeal is being undermined by being out of kilter with other jurisdictions.

This article is taken from Landlord Today