What’s The Solution to London’s Housing Crisis?

Illustration and Painting

The housing crisis in this country is one of the biggest political issues and has been for some time. There has been plenty of blame directed at the property industry but I doubt that this is the cause of the problem.

A recent study by Savills’ research team highlighted that private renters across the UK are now paying in excess of £54 billion with approximately 50% being under the age of 35. This problem has been most extreme in London where a limited supply of housing has prevented younger buyers from getting on the property ladder.

The Government recently proposed an additional £2 billion for additional 25,000 affordable homes over the next 5 years, however many fear this is not enough to solve the problem. The Mayor of London however has stated that in excess of 50,000 homes need to be built a year, with 50% being affordable housing.

As the demand for housing has continued to increase, the price of development land has also risen dramatically. When demands for affordable housing increases, developers often struggle to make a profit. This often threatens the viability of a scheme, no matter the size of the project. The result of this could be that over the next few years the amount of development decreases.

So what is the solution, and how do we get more homes being built and reboot the market?

The first thing that could be done is replace Stamp Duty by an alternative form of tax, which many surveyors and estate agents in London have been calling for. Although it will not directly result in more homes being built it is likely to re-ignite the housing market and give people more flexibility to move, rather than being trapped in a home that is too small or in a lesser location.

Many people feel that it is time to completely update and reform Planning Policy. If we account for the speed at which London’s population is growing should the stringent Green Belt regulations be reconsidered? This is an unpopular view by many, especially for those living there, but one has to remember how little space remains in Central London for the development of affordable housing.

Currently planning applications can be both time consuming and an expensive process. Negotiation can take a long time and often results in projects falling through. If a complete overhaul of planning policy was introduced this could not only speed up the process developments but also be more finely tuned to provide the additional infrastructure and affordable housing, which has become necessary.

On 22nd November the autumn budget will be announced by the Chancellor. Could this be the time we start to see a genuine solution to boost the housing market and finding a way of solving the ‘Housing Crisis’?….

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