Affordability is the real problem

Affordability is the real problem

The new draft London Plan will be published at the end of this month and will envisage the construction of tens of thousands more new homes across the capital. The Mayor’s ambition for new home building is expected to be way above the current annual target of 42,000 at 64,935.

To some extent, it is a reflection of a nationwide need for new homes. However, although the challenge – in London and beyond – looks superficially to be just about supply, the real problem is one of affordability.

Affordability is a spatial problem and requires a spatial solution: getting the right homes in the right places. The Government must focus its attention on areas where the ability to purchase and cost of doing so are more closely aligned. The Mayor’s new London Plan could then focus policies on providing genuinely affordable homes for Londoners.

The Midlands Engine and Northern Powerhouse are attracting and retaining investor attention whilst elected Mayors in Bristol, Birmingham and Manchester (amongst others) are beginning to flex their muscles. Yet this is as much a reaction to the London market as any proactive national policies. Clearer Government leadership would expedite change and provide greater long-term certainty.

Investment and infrastructure decisions are being made but too often buried within various national plans and strategies. These must be bought to the front. As with every other country in Western Europe, we should publish a national spatial plan. This would make clear how spending and policy decisions are related, supporting regional revival.

Ultimately, the provision of new homes must be aligned with the creation of new jobs. Housing delivery must be linked to new infrastructure, investment and training. Rebalancing economic growth is as much part of the solution to the housing crisis as building more homes.

If we do this right, London’s successes can be replicated elsewhere and its present challenges mitigated, to everybody’s benefit.