Prices to force families out of London
|Jonathan Pryn The Evening Standard|
A record London housing shortage is set to send property prices soaring even further out of reach of ordinary families, a new report warns today.
According to agents Knight Frank, 222,000 fewer new homes will be built by 2020 than are needed to meet London's growing population.
One of the most detailed studies of the crisis, it suggests that in the worst affected boroughs, such as Westminster, Redbridge and Kingston, as few as 10 per cent of the homes needed over the next decade are being built.
The stark forecast comes three days after a separate study said London had some of the worst housing problems in western Europe.
Knights Frank blame a "hangover" from the financial crisis, deep cuts in grants for social housing and endemic planning "confusion" for a disastrous drying up of construction.
The report says: "Around two thirds of pipeline developments have stalled... but even if these projects get off the ground there will still be a huge shortfall in housing."
It predicts demand from overseas buyers and City workers will continue to push prices up, creating new "hotspots" where developments do get off the ground.
In the most extreme example, it says, prices for new developments in the Nine Elms area, scheduled for regeneration including the restoration of Battersea Power Station and a new Northern line spur, could spike by 140 per cent in five years.
Other "flagship" developments such as Heron Plaza on the edge of the City and the planned Earls Court "villages" will transform areas seen as unfashionable, pushing up prices there.
Across the capital, planning permission has been granted for 214,825 units, of which 43,357 are under construction, compared with an estimated 374,111 increase in households by 2020.
One cause of the backlog is the pressure put on developers to include large numbers of "affordable" homes in schemes, making them unprofitable.
The crisis has been worsened by a huge cut in the Homes and Communities Agency's capital grant, which provided more than £8?billion for schemes between 2008 and this year.
Shelter's director of policy and campaigns, Kay Boycott, said: "The London housing market is out of control and completely unsustainable. We need to tackle head-on all remaining barriers to affordable house building, in particular the chronic lack of investment."
A spokesman for Boris Johnson said: "High prices, the fragile economy and the credit squeeze are hampering private house building, but affordable housing, both for rent and for first-time buyers, which the Mayor directly influences, is in better shape.
This year will see more than 16,000 affordable homes delivered in London and more than 54,000 over the next four years."
Ken Livingstone wants to create affordable housing by allowing "community co-operatives" to buy land occupied by disused public buildings.
The Labour candidate for Mayor says it could cut the price of new homes by three-quarters.