Full potential for homes in London ‘yet to be realised’

London’s boroughs could deliver 37,300 homes over the next five years, but for restricted borrowing and a lack of internal capacity and expertise.

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London’s boroughs could deliver 37,300 homes over the next five years, but their contribution is hampered by restricted borrowing capacity and a lack of internal capacity and expertise, a new report has found.

Reviewing council-led models of housebuilding across the capital the report, Borough Builders – produced by the Centre for London –  found that 22 boroughs have started to build again, driven by the need to create more housing for all tenures, to meet local needs and to deliver better places while generating a financial return.

Last night (July 17) Haringey council’s cabinet decided not to proceed with its £4bn housing joint venture with Lendlease and instead establish a wholly owned company to provide more affordable homes.

Richard Brown, research director at Centre for London, said the decision effectively ended months of speculation over a project dubbed by supporters as the future for housing in London.

“Councils across London are showing commitment to building more homes for Londoners – directly or through joint ventures.

“Haringey will now join the 17 other boroughs who have active wholly-owned development companies.

Together these schemes have 12,700 homes in the pipeline for the next five years – boroughs are ready to play a bigger role in delivering housing and making the most of their existing assets,” Brown said.

These existing schemes are already set to deliver 23,600 homes – close to 8% of the target for London boroughs over the next five years.

In comparison, councils delivered 2,100 homes between 2011-2018 across London, so this represents a significant step change in activity.

The report suggests if every one of London’s 32 boroughs committed to delivering a minimum of 10% of their draft new London Plan target (either directly or through a wholly-owned company), a total of 37,300 homes could be delivered across the next five years, representing 12% of London’s housing target overall.

But the report also highlights the challenges that prevent councils from increasing their housing delivery.

These include constraints on borrowing capacity, intra-council barriers and lack of political support, as well as planning and development issues that are also exacerbated by a lack of internal capacity and expertise.

Citing evidence from the capital’s councils, the report argues that boroughs could work together better to share expertise and maximise the number of homes they build, but also argues that policymakers need to do more to support and encourage them to deliver more.

Among the report’s recommendations are:

  • The government to relax the conditions attached to various funding streams and recognise the key role that councils can play in delivering more housing
  • The GLA should, through the existing Public Practice scheme, give more boroughs access to the development staff that they will need as they start building homes again
  • The mayor should use his funding powers to support the development of partnerships between boroughs at sub-regional level.

Victoria Pinoncely, research manager at Centre for London, said boroughs are already making a significant contribution towards achieving the aims of the draft New London Plan on small sites, densification and placemaking – but if every borough were involved or did more, it could represent a real step change in new housing delivery.

“As it stands, they have one hand behind their backs. Restricted access to funding, underfunded planning departments and weak political support for schemes hampers their ability to deliver the homes London desperately needs.

“These barriers need to be removed if we’re to realise the full potential of borough builders and meet the mayor’s ambitious housing targets,” she said.

The report focuses on approaches where councils retain a long-term stake in development and that are council-led (either through an in-house team or through a wholly-owned council company) rather than joint ventures in partnership with a private developer or a housing association.

A review of current borough building activities included a desktop review of wholly-owned council companies and direct delivery initiatives in London, further refining results through a survey which was sent to senior housing officers in the 32 London boroughs in March and April 2018.

The research has established that 22 boroughs currently have active council-led approaches, meeting 10% of their draft new London Plan targets on average.

This potential figure was calculated by applying the 10% average delivery figure against London Plan targets to boroughs that are currently inactive or meeting under 10% of their set targets.

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