Housing – Richard Brown

Mansions on the bill?

As regular readers know, On London is always on guard against attempts to divert more funding from London, already a major net contributor to UK taxes, to the rest of the country. Other regions need investment for sure, but London’s golden eggs are in limited supply. The capital’s problems, which include the highest regional poverty rates after housing costs, cannot be ignored.

But it’s hard to deny that Rachel Reeves had a point when she observed in her budget speech that a “Band D home in Darlington or Blackpool pays just under £2,400 in Council Tax…nearly £300 more than a £10 million mansion in Mayfair”.

You can decry the pointing at Mayfair when several London boroughs charge more in Counci Tax than Darlington or Blackpool. You can point out the historic reasons for the imbalance, from the tax’s origins as a post-Poll Tax hybrid of service charge and tax, to outdated valuations and variable price changes since 1991, to the relative performances of councils in different parts of the country. You can highlight the way that other local taxes, such as Business Rates, are raised in London and distributed across the country. But even so, the disparity doesn’t look fair.

The Chancellor’s solution is a new “mansion tax” – or “high value council tax surcharge” to use its full and slightly misleading title – which will be imposed on properties valued at over £2 million. It will be introduced from April 2028 – like other tax rises, kicked towards what Reeves must hope will be sunnier uplands two years hence. Treasury calculations estimate the tax will raise £400 million by 2029/30.

The “mansion tax” will clearly hit London (and the South East) harder than other English regions, but it is hard to work out precisely how much harder. The most recent comprehensive valuation of properties, which forms the basis of Council Tax bands today, was made 35 years ago. Property price changes have diverged wildly since then, so it doesn’t tell us much about current values.

One possible proxy would be looking at prices actually paid for properties. Such data is collected and published by the Land Registry. This is probably as good as anything else in the public domain, but still pretty flawed. For one thing, we cannot assume that the values of properties sold in any given year reflect the values of those that are not. There may be more high value properties than show up in the sales figures, as these have proved toughest to sell in recent years. Or, there may be fewer, as prices have dropped for this very reason (particularly in “prime” London).

Still…In 2024, around 2,600 properties in London were registered as sold for over £2 million, representing around two thirds of all sold at that level in England. Almost half of these sales were in Kensington & Chelsea, Camden, Westminster and the City of London. Properties in London were also far more likely to be sold for the highest prices: 0.5 per cent of all sales in London were for more than £5 million compared to 0.01 per cent of all such sales in the rest of England.

Extrapolating those ratios to estimate (very roughly) the impact of the measures, it looks like around 100,000 of London’s three million non-socially rented dwellings (3.3 per cent) might be liable to the tax, compared to around 40,000 of the 19 million in the rest of England (0.2 per cent). In total, Londoners could pay just over 75 per cent of an indicative mansion tax yield of £525 million.

This is a higher total figure than that estimated by the Treasury, which has no doubt modelled non-payment, price changes and various valuation finagles, but it is not that far off. My workings can be seen below.

So, Londoners will be paying the bulk of this new tax, and that will include many who feel very far from “wealthy”. But it won’t go to London. Though it is called a “council tax surcharge”, the tax has nothing to do with Council Tax: funds raised will go straight into national coffers, bypassing even a nominal allocation to local authorities (who would likely lose any gain in adjusted government grant allocations). In the words of the LSE’s Professor Tony Travers, “It’s a central government tax. Pure and simple”.

London’s net fiscal transfer will creep up from the £43 billion that went from the capital to other parts of the UK in 2022/23, and accountability will become ever more confused. The Local Government Association has already highlighted the risk that councils are regarded as accountable for a charge that they do not control or spend, and have asked that the funding raised is allocated to local authority services.

There may be significant practical difficulties in implementation too. There have been revaluations since 1991: the Valuation Office undertook one of Wales’ 1.5 million homes in 2003, and is planning another by 2028, using sales data and automated valuation to develop a more sophisticated approach to determining values.

But it’s not going to be easy. As a signal of complexity, it is worth noting that the Welsh revaluation has been postponed from this year. Furthermore, people living in houses valued at over £2 million include many who have tax advisors, chartered surveyors and lawyers on speed dial.

Experts such as Paul Johnson, Dan Neidle and Neal Hudson have also observed that the system is a throwback to the “slab” system of Stamp Duty Land Tax that was phased out in 2016, and led to sale values clustering just below the points where higher rates would kick in. April 2028 suddenly seems a lot closer.

More fundamentally, this is a clunky half measure. There is a strong case for a comprehensive reform, to fully revalue and re-band properties for Council Tax, or to go further and replace Council Tax and Stamp Duty with new property or land value taxes, using innovative valuation techniques to create a more transparent, responsive and proportionate system.

The mansion tax is not that comprehensive reform. Instead, the risk is that this measure, like Inheritance Tax hikes on owners of farmland and family businesses, annoys an influential and vocal minority, without raising huge sums.

And it will leave the core machinery of Council Tax, with its 20th Century valuations, its restrictive banding model, and its proliferating surcharges and discounts, looking increasingly dusty and dilapidated – like an unloved and barely functional household appliance that everybody hates but nobody can quite bring themselves to replace.

First published by On London

Hard Times in London Town

The new English indices of deprivation, published last week, provide an important snapshot of the complexities of poverty and other forms of deprivation faced by communities across the country. They are also unavoidably political, as they feed into local government funding formulas. This lends a strange tone to the debate about them: nobody wants to be called the most deprived place in England, but nobody wants to lose out on the funding that comes with it.

So, when the composite Index of Multiple Deprivation (IMD) placed seven London boroughs among the 20 per cent (60 out of 297) most deprived districts in the country, some anti-London moithering was inevitable. Quoted in the Financial Times, North Durham MP (and former Hackney councillor) Luke Akehurst complained that the indices could result in “leafy southern suburbs and the most exclusive parts” of central London receiving more government funding: “That can’t be right,” he said. Clearly, the poverty faced by more than two million Londoners isn’t real poverty.

The IMD combines seven different indices which are themselves drawn from more than 50 indicators, mostly measured at the level of lower super output areas (LSOAs) – small geographic units with populations of 1,000-3,000 people. These are then aggregated and weighted to show results by local authority. London’s most deprived boroughs are in the arc from Enfield to Barking & Dagenham in north east London, plus Brent in the north west. This is a similar position to 2019, when the indices were last published, though greatly improved from 2004, when London boroughs made up 14 of the most deprived 20 per cent.

The index measures relative deprivation, so London’s improving position over time may reflect deterioration outside the M25 as well as improvements in the capital. But a closer look at the six sub-indices gives a more rounded picture of where Londoners face the biggest challenges.

The two most heavily-weighted scores are for income and employment deprivation, which together make up 45 per cent of the IMD. Five of the six worst-scoring local authorities for income are in north-east London, though there are pockets of income deprivation across the inner city – from north Kensington to West Wandsworth. By contrast, only one London borough features in the 20 districts scoring worst for employment.

The difference is, as so often in London, about housing. The income index includes a count of people living in households receiving benefits (including in-work benefits) with an income below 70 per cent of the national average after housing costs; in 2019 it counted people living on less than 60 per cent average incomes before housing costs. As a result of these changes, which better reflect the reality of living in London, the number of people counted as facing income deprivation in the capital has almost doubled, from 1.1 million in 2019 to 2.2 million in 2025.

This change illustrates how London’s housing costs impoverish many working people. They also have an acute impact on children and older people. Three London boroughs – Tower Hamlets, Newham and Hackney – have the highest levels of children and older people living with income deprivation. Many people who can afford to are choosing to leave London to start families, which means the population staying in the city is disproportionately made up of those affluent enough to afford its family housing, and those who don’t have the luxury of choice.

In other areas, London scores relatively well. Its impressive record on school attainment and university progression is reflected in low scores for education and skills deprivation, albeit with some “not spots” of relatively poor performance in parts of outer London (for example, Enfield, Brent and Ealing). Londoners are also relatively healthy, with no boroughs in the ten per cent of worst performing, but some pockets of ill health concentrated in an inner-city arc from Camden to Newham.

Crime is much less concentrated in London than right-wing demagogues might suggest. Only one borough – Hackney – features in the ten per cent worst districts (compared to seven in 2019). However, the two English LSOAs with the highest rate of theft (one of the constituent indicators) are in the area of Westminster stretching from Fitzrovia down to Embankment, probably reflecting the epidemic of phone snatching that plagues parts of central London.

Two final indices mix indicators that give an ambiguous picture of London and its challenges. A “Barriers to Housing and Services Index” seeks to balance indicators of how easy it is to access housing and other services. London boroughs score well on “connectivity”, but much less so on access to housing, homelessness and overcrowding. As a result of these latter indicators, London boroughs account for seven of the ten worst performers on this index.

The final “Living Environment Index” is a bit of a wild card. London boroughs make up eight of the ten worst performers, but the indicators include whether houses are deprived of private outdoor spaces, their energy performance, levels of noise pollution, and traffic casualties among pedestrians and cyclists.

These all seem to penalise dense places with busy roads, places with lots of older buildings and places near airports. By this measure, Mayfair, Primrose Hill and Knightsbridge are among England’s 10 per cent most deprived LSOAs. Here, you can see Luke Akehurst’s point, though this Index makes up less than ten per cent of the composite IMD.

Even if the Living Environment Index doesn’t seem quite right, the bigger message of the new indices is that deprivation and disadvantage are genuinely multi-faceted, and can’t be simply be summarised as “pampered south, neglected north”. London is not a bad place to live, and does a lot better on measures such as crime than many of the populist right on both sides of the Atlantic would argue. However, as so often, housing costs are a pervasive drag on liveability, pushing people into poverty, hobbling aspiration and jeopardising the UK’s prosperity.

Originally published by On London.

Gimme shelter

At the time of writing, no London borough has formally announced plans to challenge asylum seekers being housed in hotels. And while there have been recent protests at hotels in Canary Wharf and Islington, protestors objecting to “asylum hotels” in the capital have often been outnumbered by counter-protestors.

This might seem typical of a city characterised by diversity, one which has welcomed people fleeing persecution through the ages – from Huguenots, to Jews, to Ugandan Asians, to Vietnamese “boat people”. London is already doing its bit, and more besides, in accommodating asylum seekers. But any shift in national policy in response to this week’s Epping court ruling could have big impacts.

According to a Migration Observatory briefing issued last week, the number of asylum seekers in London grew more than fourfold between 2018 and 2024. Its share of the UK total rose from nine to 19 per cent, part of a broader shift to southern England from the rest of the UK. Any connection to the distribution of marginal seats may be coincidental.

Use of hotels and other short-term “contingency accommodation” (rather than “dispersal accommodation”, including rented houses and flats) increased from five per cent to 45 per cent of asylum seekers from 2019 to 2023, but has fallen back since then, to 30 per cent at the end of last year. The big exception is London, where hotels still housed approximately 12,000 asylum seekers, 60 per cent of the city’s total, in early 2025.

Both the total number of asylum seekers and the proportion housed in hotels are highest in Hillingdon and Hounslow. They are the London boroughs closest to Heathrow Airport, one of the UK’s most important ports of entry (though less popular than the Kentish coastline as a location for performative blimpism by the likes of Robert Jenrick, Nigel Farage and Rupert Lowe). These boroughs are two of the six in the UK where the number of asylum seekers housed locally is higher than the maximum specified in national agreements.

So London, as ever, is something of an outlier. Meanwhile the government is clearly in a fix. It has pledged to phase out the use of hotels to house asylum seekers and may be forced to speed up the process in response to court cases and protests. What part is London likely to play in their thinking?

The government could decide that “London can take it”, and load more asylum seekers into the city. This would encourage those who want trouble to stir it up, not helped by the fact that the Epping court judgement took (cautious) account of local protests. On the other hand, the move away from hotels could be accelerated, raising questions of where 12,000 temporary Londoners are to live.

The problem is that until claims are processed housing asylum seekers really is a zero-sum exercise. If they are not accommodated in hotels, where do they go? Military camps have been tried but proved controversial, as did the now-abandoned Bibby Stockholm barge. Aside from raising questions about their humanity or lack of it, such proposals are complex to put into effect – camps need to be fitted out and barges need to be procured. There are few obvious quick fixes.

Outside London and the wider south, the last two years have seen a shift away from hotels towards longer-term “dispersal accommodation”, often private rented sectors homes in multiple occupation (HMOs). But these are in short supply in London. Asylum seekers would be lining up alongside homeless families, who number 70,000 (half of the English total) in the capital. It is also notable that some local authorities (outside the south east) are already reported to be tightening controls on using HMOs in this way.

So the risk is that local authorities, already struggling with the costs of homelessness, would be left to support any asylum seekers evicted from hotel accommodation. Hillingdon Council has already written to MPs to protest about the Home Office planning to “evict 2,300 asylum seekers into the borough without secured accommodation or support” and has claimed that supporting asylum seekers is adding £5 million a year to already-stretched budgets. The BBC has reported a rise in rough sleeping and a spread of tented encampments in the borough, and Hillingdon is now reported to be reviewing the Epping decision.

London has the capacity to welcome and absorb thousands of people, and it does so, year after year. I do not think the capital is about to erupt in protest. But there is a question of how much the nation asks of it. London is the economic engine and the fiscal float for the UK. Should its boroughs also be expected to support an ever-growing share of people in urgent housing need, while funding is diverted to other parts of the country?

First published by OnLondon.

Fade to Grey (Belt)

Last week, Angela Rayner gave Marks and Spencer permission to demolish and rebuild their flagship Marble Arch store, in line with plans first submitted to Westminster City Council in February 2021. In between those dates, the proposal was considered by Westminster and by Sadiq Khan (both of whom approved it), by a public enquiry and by Michel Gove (who overruled them all and turned it down), by the High Court (which overturned Gove’s decision) and by Rayner (who gave the go-ahead). Whatever view you take of the proposals, these layers of decision-taking and months of delay cannot be right – the reconstruction phase of the Notre Dame project took less time.

Against this backdrop, you can see why the Deputy Prime Minister has announced major reforms of planning this week – a consultation on planning decision processes on Monday and now a new National Planning Policy Framework. The consultation paper proposes a national “scheme of delegation” to ensure that more planning decisions are taken by planning officers, rather than by planning committees. The paper also proposes smaller strategic committees to agree documents such as opportunity area planning frameworks, and seeks to beef up training for planning committee members.

The proposals have been widely welcomed as a helpful act of streamlining, which reduces the risk of capricious committee decisions to reject proposals even when they are in line with local planning policy. Such refusals may lead to amendment and a new application, or to appeals to the planning inspectorate, but cause delay and incur cost either way.

For some commentators, this approach is also a helpful first step towards a “zoning” process that shifts the political focus from considering individual applications to agreeing policies and design codes. “Shouldn’t we be aiming for a system which makes [planning committees] redundant entirely?” architect Russell Curtis asked. If proposals comply with policies and codes, they can go ahead with minimal paperwork, though agreeing local plans and policies would become more complex and contested were they to give an automatic green light to compliant proposals.

As ever, London is a bit different. The capital already leads the way in delegating planning decisions and in processing applications fast. The most recent government stats show that in the year to June 2024, 97 per cent of decisions were delegated to officers, more than in any other region. Some boroughs delegated nearly all decisions.

London boroughs work fast too, deciding an average of 93 per cent of major applications within government-mandated deadlines (or other deadlines agreed with applicants) in the two years to June 2024, compared to 90 per cent or fewer in other regions. The capital also has lower rates of decisions being overturned on appeal than most other regions. The system works efficiently.

But it is not enabling the homes London needs to be built. London planning authorities turned down more applications than in other regions: 20 per cent across the capital compared to 15 per cent across England, and as many as a third in some outer London boroughs. Total application numbers are for around 60,000 homes per year, and their number has fallen by a third since 2016, significantly faster than in other regions.

This fall off in planning activity and low rate of approval feed off each other – if it is difficult to get planning permission in London, some developers stop trying or look elsewhere. London’s problems look like problems of policy as well as process.

That is where the new National Planning Policy Framework (NPPF) comes in. It confirms binding targets for local authorities across England. London’s new target is around 88,000 homes per year. That’s higher than the 80,000 target proposed after the general election, but lower than the 99,000 target that the Conservative government set in 2020 (though in 2022 the Conservatives also made targets “advisory”). It is, nonetheless, a huge jump from the current London Plan target of 52,000 homes per year, let alone the average 38,000 net additional homes built over the past five years.

The big policy change in the NPPF is its very careful relaxation of Green Belt rules. The Framework says that if a council is unable to meet its target through using previously developed land and densification, and if it is unable to collaborate with a neighbour to plug the gap, then it can consider using Green Belt land.

It must first look at previously developed land in the Green Belt, then at “grey belt” land which does not strongly contribute to the Green Belt’s core purposes – checking unrestricted sprawl, preventing urban areas merging into each other and preserving the setting of historic towns.

Other rules, relating to affordable housing, new and enhanced green space, design quality and infrastructure provision, still have to be followed, and land that is protected for special scientific interest or outstanding natural beauty, as a “local green space” or as part of a national park is excluded.

Even with all those caveats, the new policy makes London’s edges ripe for review. The definition has helpfully moved on from an aesthetic focus on “poor quality” Green Belt (which may be in entirely the wrong place), to considering whether Green Belt land actually does what it is meant to do.

On the face of it, a lot of the inner Green Belt within Greater London could meet the criteria for consideration: there’s still plenty left to separate London and surrounding towns, and a managed release is not unconstrained sprawl. But governance and geography are tricky: some of the boroughs facing the biggest shortfall don’t have much Green Belt land, and even when they do the land may not meet the government’s tests.

That could be a recipe for mess and disagreement but could also be the opportunity for a metropolitan solution. The Mayor could work with boroughs to marginally redefine London’s edges, to share the load of housebuilding, and to plan for urban extensions that make the most of existing and new infrastructure.

Could that happen? Khan opposed Green Belt reviews in the past (when a Conservative government would have vetoed them anyway), but times have changed. Khan’s 2024 manifesto was silent on the Green Belt, and a London-wide review would be a good way of demonstrating the value of a Labour Mayor to a Labour government, and vice versa.

But Green Belt extensions will not solve all of London’s housing delivery problems. London needs more planning permissions and more building, including of the around 300,000 homes that already have permission. But a viability crisis is holding back both. Former Southwark leader Peter John has argued that affordable housing requirements without sufficient grant subsidy are stifling development in some cases, and pushing up prices of market homes to enable cross-subsidy in others: “a vicious circle of non-affordability is made worse by demanding ever higher levels of affordable housing without some other grant subsidy being provided.”

Other commentators, such as Beacon Partnership’s Steve Beard, have argued that it is the sheer weight of design, carbon offset and infrastructure obligations imposed in London that is making schemes unviable. Centre for Cities’ Ant Breach argues that the London Plan duplicates local plans and suppresses development, pointing to the London Plan review commissioned by the last government, which found “persuasive evidence that the combined effect of the multiplicity of policies in the London Plan now works to frustrate rather than facilitate the delivery of new homes, not least in creating very real challenges to the viability of schemes”.

Given London’s slowing rate of housing delivery, and its stock of permitted but stalled developments, these arguments should be taken seriously. Are the policies that worked in a boom, when rising prices washed away the costs of planning obligations, also the right ones for when house prices are stagnant and delivery is stuck? After the financial crisis, quantitative easing, a cheap pound and open borders helped fuel a property boom, but these engines have fallen silent.

At the same time, affordable housing provision has become increasingly dependent on market housing. Around 50 per cent of affordable housing in London is now delivered as a planning obligation, so when private housebuilding slows, so does affordable housebuilding. Recent Greater London Authority (GLA) analysis shows the impact of this. In 2023, 38 per cent of the homes granted planning permission in London were affordable – a total of 11,725 units. In 2015, only 26 per cent were affordable, but this totalled a higher 14,000 units.

If a system based on cross-subsidy has stalled both affordable and market provision, either policy or funding need to shift. London has an urgent need for more affordable housing, so lowering targets too far seems perverse. But 35 per cent of something is still better than 50 per cent of nothing.

Alternatively, higher grant levels would enable boroughs, housing associations and private developers to build more affordable homes. A recent Centre for Cities report suggests that the government’s £500 million Affordable Homes Programme (administered by the GLA within London) would need to triple in size to get public housebuilding rates back up to their mid-20th Century levels. A tall order, but maybe one that could be justified as an investment to save on long-term housing benefit and temporary accommodation costs.

Finally, central government should recognise that it too needs to be part of the solution. Successive governments’ accumulation of policy prescriptions (including new duties such as “biodiversity net gain”) represent a tax on development, adding to those imposed by local and regional government.

Everything is introduced for good reason, but maybe the time has come for an open discussion of where other policies and stakeholder interests are strangling the government’s declared growth imperative. And, to end where we started, if an application has been considered by London’s elected local authorities and by its Mayor, does Whitehall really need to have a go too?

First published by OnLondon.

Housing in London – every cloud has a cloudy lining

There’s a German word, “dunkelflaute”, which translates as “dark doldrums” – periods when there is no wind or sun to generate electricity (making you reliant on coal and Russian gas, if you happen to have shut down all your nuclear power plants). London’s housing market seems to be facing dark doldrums at the moment: prices are stuck in a rut, residential planning permissions are at half the level they were five years ago, and transaction volumes and new building have slowed to a crawl.

Property prices in London shot up after the financial crisis, but have risen far less dramatically since 2016, as a result, property analyst Neal Hudson suggests, of tougher regulation of residential mortgages and more taxation of property investment. The market boomed briefly from 2020 to 2022, but has fallen back since then. According to the Nationwide Building Society’s index, average prices were ten per cent higher in 2024 than eight years earlier, but that is a 15 per cent fall once inflation is taken into account.

After decades of soaring prices, surely cheaper housing is good news for somebody? The Nationwide data show that the average price paid by a first-time buyer in London is now less than nine times median earnings, the lowest ratio for ten years. Rental affordability also seems to be improving, with government figures showing average rents taking up around 40 per cent of median income of renting households in 2022/23, compared to 57 per cent in 2016/17.

But neither of these figures tells the whole story. To paraphrase Withnail, living in London is becoming cheaper for those who can afford it, but remains prohibitively expensive to those who can’t.

Cheaper houses are only cheaper if you don’t need to borrow money. For first-time buyers, rising interest rates have gobbled up any savings from price falls: in 2020-22 Nationwide calculated that mortgage payments accounted for around 50 per cent of first-time buyers’ take-home pay.

Rising interest rates pushed that up to 66 per cent at the end of last year, though it has fallen back to around 60 per cent since then (a similar level to 2016). And, even with lower prices, London buyers still need to find deposits of £110,000 – a gargantuan sum for anyone without blockbuster bonuses, access to the Bank of Mum and Dad, or at least somewhere to live rent-free (and possibly holiday and fun-free too) while they scrimp and save.

As Paul Johnson of the Institute for Fiscal Studies recently observed, this means that anyone without wealthy parents or somewhere to stay rent-free will find it much more difficult to move into their own property in London and to enjoy everything the capital offers.

This might not matter if the Levelling Up dream of excellent jobs everywhere had been realised. But it hasn’t, and London should be able to offer opportunities for all, not just those lucky enough to have been born within the M25.

Apparent improvements in rental affordability also obscure a less positive reality. Government figures show that between 2016/17 and 2022/23, rents fell from 57 to 40 per cent of household income for people renting. But for someone earning median wages in London, rent fell from 59 per cent to 53 per cent of gross earnings over the same period – a significant drop, but much smaller than that implied by the official figures.

Why have renters’ household incomes increased faster than median wages? It could be a result of an increasing number of renting households having more than one earner, or maybe lower earners being squeezed out of the private rental market altogether.

Every cloud has a cloudy lining. If stagnant house prices are not doing much for renters or first-time buyers, they are doing even less for housebuilding. In 2023/24, around 32,000 dwellings were added to London’s housing stock, the lowest level since 2014/15, when the city was still emerging from the financial crisis. These include conversions and changes of use (including the dwindling number of office-to-residential conversions). And only 33,000 new residential units were given planning permission in 2023/24 – way below the peak of 80,000 plus each year between 2014/15 and 2018/19.

When prices fall, housebuilding slows, almost as a thermostatic reaction. Developers base their business plans on a range of projections, including changes in house prices and build costs. If prices go up faster than costs, building goes ahead. But in a stagnant market with high construction inflation, plans are paused or slow-pedalled.

After the financial crisis, housing associations were able to take up some of the slack, completing an average 7,000 homes each year in the five years from 2008/09. But their output in the past five years has been half that, as the need to fund safety improvements and squeezed grant levels have reduced capacity. Local authorities have started building more, completing 3,000 units in the past two years alone, but there is still a gap.

The dark doldrums cannot last forever. Interest rates are forecast to fall next year (if not as fast as previously predicted), which may help more first-time buyers to take advantage of lower prices. In addition, while provisional figures for housing starts in 2023/24 are the lowest since 2020/21, construction economist Noble Francis has observed that brick deliveries, a good leading indicator for housebuilding activity, were 21 per cent higher in October than a year earlier.

There is also Deputy Prime Minister Angela Rayner’s shake-up of planning, heavily trailed in interviews and newspaper pieces last weekend. Will this be enough to treble London’s house building rate in order to achieve its 80,000 homes a year target? What other changes might be needed? Watch this space.

First published by OnLondon.

Right on target, most direct?

Perhaps the most noteworthy aspect of Angela Rayner’s housing announcement on Tuesday was its tone. Revealing the surprise reduction in London’s annual target, from 100,000 to 80,000, the Deputy Prime Minister said this was “still a huge ask, but I know it is one that the Mayor is determined to rise to and I met him last week about this”. Warm words and a sense of common cause and deals to be done, rather than brickbats, blame games and bunker mentalities. It may be just a honeymoon, but it’s a refreshing change.

What of the changes themselves? Are they an acknowledgement of London’s persistent failure to fulfil its potential or a token of a more reasonable ambition? The first thing to note is that London’s target is still more than twice the capital’s historic delivery rate – averaging 38,000 homes in the three years to 2022/23 – and requires a much higher jump from these rates than is expected from any other English region. It also represents more than two per cent of existing stock being built every year, which, as Jim Gleeson shows, is a much bigger ask than in any other region. London contains 16 per cent of England’s population, yet is still being asked to contribute 22 per cent of its new housing.

The reduced target should not be seen in isolation either. As Nick Bowes has observed, the new housing targets reflect the challenges of accommodating London’s population growth within its boundaries – challenges that were noted by London Plan inspectors ten years ago. South East England’s annual target has risen by the same number as London’s has fallen, with particularly sharp rises in some areas on the capital’s periphery.

The new targets could be said to reflect the reality of London being part of a southern conurbation, rather than a city alone. It will be interesting to see whether the New Towns Taskforce proposes urban extensions that straddle the M25 to help meet this combined need, and to see how London and surrounding local authorities might work together on these.

There are some anomalies within London too. Targets have been halved for the eastern boroughs of Tower Hamlets, Newham and Barking & Dagenham, even though these areas have been the policy focus for London’s growth for two decades and accounted for more than 20 per cent of its new homes in the last three years. On the other side of town, Kensington & Chelsea’s target has trebled, reflecting the impact that high house-price-to-earnings ratios have on how targets are generated.

We can expect these quirks to be ironed out as city-wide targets are fed through to borough targets in the new London Plan. The bigger question is whether London has any chance of actually building 80,000 new homes a year. Recent indicators show that build rates are still struggling to recover to pre-pandemic levels. Registrations of energy performance certificates for new homes, usually taken as a leading indicator of housebuilding, numbered 36,000 in the year to June 2024 and have been falling since 2021, though may have started to turn round in the past six months.

The big problem, as On London recently reported, is not planning permissions – London has planning permission in place for 300,000 homes – but the money, materials and muscle to build them out. The government has had less to say about this so far. There is a reference in the Rayner’s speech to allowing the Greater London Authority more flexibility within its Affordable Homes Programme, but this only helps supply a small proportion of homes in the capital.

In the medium term there may be more policy support and more money. Funding for infrastructure and affordable housing might be found as fiscal conditions improve, skills shortages may ease and changed perceptions may bring more investment to London and the UK. The National Planning Policy Framework consultation also starts to grapple with one of the knottiest issues in development: how the land market can be better managed to stop inflated value expectations making development unviable.

Meanwhile, London’s housing affordability challenges persist. The lowered housing target has been criticised, including by some of the YIMBY activists who have been the loudest cheerleaders for the government’ town planning reforms, but it is a nod towards realism about the scale of the task facing London.

Maybe the Mayor, boroughs and government can join forces with developers to double London’s building rates. It’s a Herculean task, but the will to work together is there, even if resources remain sparse. When London gets near to building 80,000 homes a year, then we can start debating whether 100,000 would be a better target.

First published by @OnLondon.

Get Britain Building Again…again

The 2024 Labour manifesto stands in curious contrast to the Conservatives’. Rather than wacky suggestions for turning inner London into Paris, we have a document with more than 130 mentions of “change” but tantalisingly few specifics about how this change will be realised. A Labour government “will introduce effective new mechanisms”, “will strengthen”, “will take steps to ensure”, “will review”, “will work with partners to drive”.

You have to think/hope that the Labour front bench has some idea how they will actually achieve these aims, but they are certainly not telling us what they are – understandably so when they are riding so high in the polls and staring down queasily at the rocks below.

On housing, the target of 1.5 million new homes over the next Parliament is 100,000 less than the Conservatives have pledged to “deliver”, but still way ahead of build rates in the past 25 years. With the exception of a crowd-pleasing stamp duty surcharge for foreign buyers there is not much detail, but the manifesto does sketch out some of the bottom-up carrots and top-down sticks that will “get Britain building again”.

These carrots and sticks are presented as working together in single-minded pursuit of Labour’s mission to “kickstart economic growth”, but you can see some internal tensions. There will be more money for planners, but also tougher sanctions where local plans are absent or outdated. Communities will shape housebuilding, but a Labour government will intervene where necessary. Development will be “brownfield first”, but there will also be a “strategic approach” to Green Belt designation and release. There will be new towns, but planned and built in partnership with local communities.

There is a commitment to “exemplary development” and a careful pledge that, in some cases, compulsory purchase prices will be based on “fair compensation” rather than on the values that could be achieved once planning permission is granted. The Levelling Up and Regeneration Act introduced limited provision for this at the discretion of the Secretary of State, so Labour would presumably extend this. A wider application will be particularly important for new towns or planned urban extensions in the Green Belt, where unknown speculators are rumoured to buy up options on “strategic land” in the hope of untold rewards if planning permission should ever be granted.

Metro Mayors and combined authorities will be given a role in planning for housing growth, perhaps modelled on the powers that the Mayor of London has today. This looks like a good way of bridging between the central and local priorities, but could also create clashes between elected Labour Mayors and an elected Labour government. Sadiq Khan has already taken a stronger line against Green Belt development than the Labour leadership does, and the London Plan has been criticised by Michael Gove’s department for overloading developers with planning obligations. There are good reasons to be optimistic about what Khan can achieve with a Labour government, but there may still be storms ahead.

Renters will get protection from unfair Section 21 eviction and arbitrary rent rises (as promised but not delivered by the Conservatives). In addition, the manifesto pledges “the biggest boost in social and affordable housebuilding in a generation” – somehow achieved with existing Affordable Homes Programme funding – and to reduce the scope of Right-to-Buy.

The flagship policy to help first-time homebuyers – a mortgage guarantee scheme to reduce the deposits needed – is not described in any detail. However, if it is anything like the one introduced by the current government in 2021, it will have limited impact in London: buyers still need to put down a minimum five per cent, which can easily be £20,000 or more in the capital. Recent government statistics show that the scheme was only used by around 1,500 London first-time buyers (with an average household income of £95,000) between April 2021 and September 2023, fewer than any other English region. The deposit gap will remain a huge challenge for many Londoners.

This general election campaign has been odd in many ways, and the main parties’ manifestos underline this. The Conservatives’ document reads like a challenger’s – full of shiny, eye-catching initiatives gleaned from think tanks and special advisors. By contrast, for all its change-y vibes, Labour’s is cautious, sensible and careful not to leave a flank exposed to enemy fire, but with some inherent tensions half-glimpsed beneath the surface.

Serious discussion of London and its problems is absent from either manifesto (Labour only mention the capital twice: once as a case study voter’s workplace and once as the party’s postal address), but this may not be a bad thing after a decade when the capital has been used as a general purpose scapegoat for everything from regional inequality, to Brexit division, to populist discontent. Maybe that type of debate feels a bit beside the point given the challenges the whole country faces today. It would be good if we could use this election to move beyond it.

First published by OnLondon.

How do they expect to be taken seriously?

The 2024 Conservative Manifesto, like the RMS Titanic’s Spring 1913 entertainment programme, should probably be seen as “aspirational” at best. There’s an insouciance in the way it raises the quota for annual housing delivery in England to 320,000 from the 300,000 promised in 2019 – a target that has been undershot by at least 50,000 in each of the past five years – which suggests they are not really engaged.

The manifesto is not all bad. There are glimmers of light in the housing section. Leasehold reform and the abolition of Section 21 evictions are good ideas, just as they were in 2019, though the fact that the pledges need to be repeated does not reflect well on the government’s record in office.

The manifesto also proposes temporary Capital Gains Tax relief for landlords who sell to their tenants – a good incentive for those who want to quit the sector, though some mechanism for sharing the benefit with tenants would help bridge the huge deposit gap that renters face, in London above all.

The document’s references to London are sparse and generally weird. They largely focus on attacking Sadiq Khan (recently re-elected with an increased majority) and his deputies: Night Czar Amy Lamé is held culpable for the closure of 3,000 pubs bars and nightclubs since March 2020, as if nothing else of note has happened since then.

But on housing the manifesto’s grasp of reality becomes shakier still. To achieve its super-Stakhanovite target for housebuilding, it promises “gentle densification” of urban areas – apart from inner London, where densities will be raised to “those of European cities like Paris and Barcelona”.

I’m a big fan of density, and of Paris and of Barcelona, but this is loopy. Comparative density is tricky to measure, but a rough read-across is possible using Tom Forth’s Circle Populations website, which calculates populations around particular points. The 5km radius around London’s centre, traditionally the statue of King Charles I at Charing Cross, has around 1.1 million residents.

The equivalent area in Paris, drawn from outside Notre Dame, has around 2.1 million. Barcelona is harder to compare because of its position on a strip between mountains and sea, but scaling up a 3km-radius circle around Eixample, which includes most of the city centre, yields a population of around 2.4 million.

The idea of doubling the number of people living in central London within five years seems even more of a stretch than the national housing target, and the manifesto contains no clues about how this would be achieved.

The population of the capital’s Central Activities Zone (an area slightly smaller than a 5km-radius circle) only increased by a quarter between 2010 and 2020. Even looking at a wider, 10km-radius, circle would require population growth of around 30 per cent to match Paris compared to ten per cent population growth in inner London between 2011 and 2022.

Central London could certainly be denser. Delivery on some opportunity areas has been slow – though in the case of Euston the government is hardly clean-handed – and as working patterns change there are opportunities to re-allocate some lower-grade commercial space. But short of razing the City of London – which the manifesto pledges to “support as the leading global market” – and other business districts, or lifting conservation area restrictions from the capital’s historic core, it is hard to see how these uplifts are achievable in the next decade, let alone the next Parliament.

In any case, who will be able to afford to live, or at least to buy their own home, in the capital? The manifesto also pledges to relaunch the Help to Buy scheme, which offered government loans to help first-time buyers of new builds to afford their deposit. The scheme’s subsidies have been much derided for boosting house prices and/or being scooped up by developers.

Personally, I think the scheme could be refocused to help those without family wealth, rather than to boost new build, but that’s another issue. The previous scheme allowed a maximum loan for 20 per cent of value across England. This was raised to 40 per cent in London from 2016, following very low take-up. The new version makes no such special provision, so it is hard to see who will be able to use it to buy property in any newly tower-lined streets of the city centre.

Perhaps the plan is for a cataclysmic property price collapse so that London’s house prices are levelled down to those beyond the capital? Perhaps all the buyers would be those few lucky foreigners who the new “legally binding” cap on immigration allows in? Yes, we know the Conservatives will struggle to win seats in inner London, but treating the capital and its housing crisis so casually seems irresponsible. If this is all they can come up with, how on earth can they expect to be taken seriously?

First published by OnLondon

Density – free riders and secret sauce

Russell Curtis, architect, On London contributor and one-man spatial think tank, published a new paper, Towards a Suburban Renaissance, on his blog last week. Reflecting on their generally low and static densities, Curtis argues that London’s suburbs could accommodate many more homes near stations, by gentle densification of existing residential streets – an upwards extension here, a replacement of a house with a low-rise block of flats there, a new build in a back garden there.

Without even encroaching on protected industrial land or open spaces, Curtis calculates that London could accommodate around 900,000 more homes in this way. Current completions are much lower than the current London Plan target of 52,000 homes a year, and both government ministers and London think tanks say that target should be set higher still. Realising even a small part of the potential that Curtis identifies would be a big boon.

You might think that in a city with a rampant housing crisis and record levels of homelessness, such a modest proposal would be enthusiastically debated by mayoral candidates in an election year. Or…you might not actually, because if you are the sort of person who reads On London, you are probably aware just how politically tricky suburban densification is in a contest where every Outer London vote counts.

Politics confounds any attempt to boost housing supply in the capital through suburban densification. The result is that any vacant site is developed to the max and everything else remains untouched, leading to a lumpy cityscape and eerie juxtapositions such as the transition from towers around East Croydon Station to the two-storey terraces of surrounding streets. Everybody can see the dysfunctional results of this approach, but the politics of changing tack are too tough: as Curtis has written for On London before, both the Mayor of London and Croydon Council have backed down from suburban density-friendly policies.

There are ways to open up the conversation, at least. The “Street Votes” proposal, developed by Policy Exchange and championed by the Nicholas Boys Smith, chair of government’s Office for Place, proposes empowering local communities to redevelop their own neighbourhoods, sharing in economic benefits and ensuring that redevelopment is seen locally as an enhancement rather than a blow to quality of place. A government consultation on making this idea a reality has recently closed, and Street Votes could make a difference where communities can see the potential benefits.

But I think there’s a bigger strategic issue too, about how we talk about density and amenity. I was thinking about this recently over lunch in a small village on the edge of London. Our hosts, heavily involved in the parish council, were discussing how they hoped to use tree preservation orders to scotch any danger of new homes being built on adjacent land.

Their other big campaign was to find a way of re-opening the local pub, which was shutting down owing to dwindling trade. They were prospective clients of my partner so I bit my lip, but in my mind’s eye I was shaking them by the lapels and shouting, “Don’t you see the connection? No more people means no more pub!” To which you might add, no more primary school, no more bus service, no more local shop…

When I look on borough planning consultation portals, I can always find an option to comment on loss of amenity from a development. It’s much harder to comment on loss of amenity from not developing. Across London’s and other cities’ suburban high streets, shops, restaurants and bars are struggling to survive in the face of changing consumer habits and constrained spending.

One answer to this is to shrug, feel a twinge of sadness and let the market find more economically viable uses for the space. Another is to try to make sure these services have enough customers to keep going. You don’t have to go to the pub every evening or ride the bus every day yourself, but you shouldn’t prevent the people who might do so from moving into the area and then complain when the landlord shuts up shop or Transport for London cuts service frequencies.

In urban areas we are all free riders, locked into relationships of mutual reliance on other citizens, and their use of public and private services. If we seal off our neighbourhoods from newcomers, we don’t preserve their character so much as undermine it. We need more homes in London to address the housing crisis for sure, but also to sustain the urban services, quality and vitality that bring people here in the first place. Density is the secret sauce of our cities. We need to sing its praises.

First published by OnLondon.

Unfinished evolution – ten years of change around the Olympic Park

“Gentrification” is always front and centre of debates about the impact on east London of the London 2012 Olympic and Paralympic Games. Legacy sceptics claim the “regeneration” of the Lower Lea Valley has resulted only in long-established working-class communities being driven out of their own neighbourhoods by more affluent incomers. Its champions take a different view, pointing to new amenities, a better environment, more jobs and homes, and rising educational attainment.

Yet Census and other data suggest that neither of these sharply opposed positions reflects the complex realities of rapid demographic and social change in this part of the capital.

To declare my interest, I worked on the project – mainly the “legacy” elements of the Queen Elizabeth Olympic Park, as it was renamed – from around 2004 to 2014. What interested me at the time was the idea of the project achieving the “regeneration of the area for the direct benefit of everyone that lives there”, in the wording of the aims agreed between the government, the Mayor of London and the event organisers.

Some commentators consider that promise to have been comprehensively betrayed. They argue that Park facilities have done nothing for local communities, with homes, workplaces and leisure centres being built for middle-class newcomers, while accelerating the displacement and victimisation of locals.

But there is a potentially positive story to be told too. In 2009, the four boroughs around the Olympic Park – Tower Hamlets, Newham, Waltham Forest and Hackney, plus Greenwich and, at a later stage Barking & Dagenham, set out a plan for “convergence”. Their aim was that on a range of indicators – from school attainment to employment to crime – these six “growth boroughs” would stop underperforming the London average.

Achieving this deceptively modest-sounding goal would be a big deal. It would involve disrupting patterns of migration that have operated for decades, if not centuries. As successive waves of new arrivals have moved into east London, its population has changed. But when newcomers prospered, they tended to move on and out, often further east, meaning that patterns of disadvantage persisted. East London saw displacement, but without gentrification.

Could this be reversed? Could the area around the Olympic Park experience a more inclusive process of change that enabled local people to stay and succeed – “gentrification from within”, as I glibly termed it when working for the London Legacy Development Corporation (LLDC)?

There has certainly been change. As OnLondon has previously reported, many of the 2020 convergence targets were met well ahead of schedule. Surprisingly, beyond saying the Growth Borough Partnership was “put into hibernation” in 2018, the website is quiet about this progress. This is unusual, as it is normally when targets are likely to be missed that they are quietly dropped by government bodies, rather that when they are on course to being achieved.

Perhaps one reason “convergence” has been sidelined is that it is too blunt-edged a metric, measured at too wide a scale. Lower unemployment, for example, could be achieved by displacing and replacing communities, instead of by helping them flourish. Nor does convergence distinguish between the impact of the London 2012 Games and other grand projects, including the London Overground extension and the completion of Crossrail, let alone wider socio-economic changes such as the impact of austerity across London.

The 2021 Census makes a more granular exploration of change possible. It has flaws, not least because it took place when many Londoners were temporarily out of town as a result of the pandemic. Furthermore, the data only captures aggregate rather than individual outcomes, and does not look back to 2001-11, when anticipation of and preparations for the 2012 Games were already having an impact. However, datasets comparing the 2021 results with those from 2011 do allow us to look in a greater level of detail at how the area round the Olympic Park has changed (the comparison datasets are collected here).

What follows first looks at the extent of population change around the Queen Elizabeth Olympic Park and then explores what we can infer about the components of that change – and specifically whether it represents a displacement of or an addition to existing communities. The “Olympic Park and Fringe” is defined by the following “middle-layer super output areas” (census tracts with a population of 2,000-6,000 people):

*Not included in some comparisons as no 2011 data available.

A decade of population growth and churn

The sheer pace of population change is striking. Between 2011 and 2021, London’s population grew by around eight per cent (though many inner London areas saw a fall, largely attributable to the temporary impact of the pandemic). Growth in the Olympic Park and Fringe was around 25 per cent, concentrated in Bromley-by-Bow and Fish Island to the west (34 and 36 per cent), in Stratford New Town and Carpenters, and in Mills Meads to the east and south (71 and 73 per cent).

The Census figures only show net change – the combined impact of myriad arrivals and departures over a ten-year period. Another data source, the Residential Mobility Index, which draws on sources such as electoral registers and land registry, estimates population “churn” – the proportion of households that have changed over a period of time. For the average London borough, around 50 per cent of households changed between 2011 and 2023. Hackney and Newham saw similar levels, while Tower Hamlets had a 76 per cent change and Waltham Forest a 43 per cent change.

But the areas immediately around the Olympic Park experienced more dramatic change, with over 90 per cent churn around Fish Island, East Village and Carpenters. Perhaps this should not be surprising, given the comprehensive redevelopment of these areas during and since the 2012 Games. As you move further east in Waltham Forest and Newham, and further west in Hackney, the degree of churn falls quite sharply: areas such as Leytonstone, Maryland, West Ham, Clapton Park and Homerton saw churn at or below the London average. Tower Hamlets is a notable exception: there was extensive population churn across the borough, with rates of 70 per cent or more all along Mile End Road and even higher around Whitechapel and Bethnal Green.

So, population growth has been intense in the immediate hinterland of the Olympic Park, though not that much higher than in other “regeneration” areas, such as Elephant and Castle, Kings Cross and Wembley. However, both growth and churn have been much more limited as you move further away from the park.

Qualifications and occupations

The harder question to answer is whether population growth and churn represent a replacement of or an addition to existing communities, in particular a displacement of working-class people and communities by more middle-class ones. Census data doesn’t really address class, but we can try to paint a picture using some proxy indicators, and by looking at the actual changes in numbers of people with particular characteristics, rather than the change in the mix. Has growth in one community been accompanied by another becoming smaller, both in itself and in comparison to trends across London?

The first proxy indicator is qualification levels. The past decade has seen a rapid increase in the proportion of Londoners who have degrees or other higher education qualifications. This has risen from 38 to 47 per cent of the 16+ population across the city, and from 34 to 49 per cent in the Olympic Park and Fringe. The number of higher-qualified residents in these areas increased by 85 per cent and doubled around Stratford High Street, Stratford Town Centre, Bromley-by-Bow and Fish Island.

However the number of people without any qualifications has also increased, suggesting that in this case the change has been one of addition rather than substitution. Even if low-qualified people have moved out, other low-qualified people have moved in. The exceptions are the areas to the west of the Park – Bow, Fish Island, Hackney Wick and Hackney Marshes – where the number of low qualified people has fallen over time, suggesting a more permanent displacement.

A similar analysis has been undertaken by Duncan Smith at CityGeographics, looking at changes in occupational mix. He finds that the Lower (and Upper) Lea Valley has been at the forefront of change: the proportion of workers in managerial, professional and associate professional jobs in Waltham Forest rose from 40 to 51 per cent between 2011 and 2021, the most rapid change in England, and in Newham from 32 to 42 per cent. Analysis of numbers rather than proportions is not available by borough, but across London the number of people working in lower status occupations has not changed, suggesting that changes are additional not substitutional.

Housing tenure

Housing is another proxy: do tenure changes indicate gentrification and displacement? The Olympic Park and Fringe bucks London trends on housing tenure, with a sharp rise in owner-occupation (mortgaged and owned outright) particularly concentrated in Mill Meads, Stratford New Town and Carpenters, Bow and Fish Island, where new construction has been intense. So far, so gentrifying.

However, perhaps counter-intuitively, the number of households in social rented accommodation has also grown in the Olympic Park and Fringe, and at a faster than the London or local borough average. If social tenants around the Park have been displaced – and estate redevelopment projects in locations such as the Carpenters Estate have been highly controversial – they have also been replaced with more social tenants. Meanwhile, private renting has grown as it has across London. It is now the most widespread tenure in the Olympic Park and Fringe.

Ethnic diversity and employment

Another lens for examining change in and around the Olympic Park is ethnicity, which has a strong overlap with poverty and intersects with class disadvantage. The areas around the Olympic Park have always been some of London’s most diverse, with a non-white population of around 57 per cent in 2021, compared to 46 per cent across the capital.

As the table below shows, compared to London as a whole the Olympic Park boroughs and the Olympic Park and Fringe areas saw faster growth in their white and mixed-race populations, slightly slower growth in their Asian population and almost no net change in their black population. Black and Asian populations fell in Waltham Forest’s fringe areas, and all populations grew fastest in Tower Hamlets’ fringes, along Stratford High Street and into the Town Centre. This suggests that even if rapid growth in white and mixed-race populations around the Park did not actually lead directly to displacement of people from Asian and black populations, it may have constrained growth in those populations to lower levels than in other parts of London.

Another perspective on ethnicity can be seen in employment rates. In the Olympic Park boroughs these rose from 59 to 62 per cent of people aged 16+ over the decade, bringing them above the London average. The rise has been sharper still in the Olympic Park and Fringe, with rates rising from 60 to 65 per cent of the population. But, while employment rates have improved for all groups relative to the London average, employment has risen fastest for white people, while it changed much less for black and Asian people, widening the employment gap between these communities.

Unfinished evolution

Taken together, these figures suggest that the London 2012 programme has had varying and complex impacts on the local area. While there have been some signs of displacement of existing populations, particularly to the west where legacy has butted up against “Hoxtonisation”, the more widespread pattern seems to have been one of densification enabling the arrival of new and different communities. These demographic changes, along with the programmes run by the Olympic Park boroughs and LLDC, have driven convergence in employment rates, in tenure, and in occupational and educational profile.

That said, the differences in improvement in employment rates, alongside recent depressing news about falling life expectancy, suggests that structural disadvantage continues to hit some east London communities hard. Twenty years after London was awarded the Games and as the boroughs, the Mayor of London and the LLDC develop inclusive economy plans, London 2012’s legacy is an unfinished evolution.

First published by OnLondon.