Tag: London

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.

Back to work

Londoners have been slow to get back to their desks compared to workers in other large cities, according to Return to the Office, the latest report from think tank Centre for Cities. Why is that, does it matter and what can be done?

The report’s polling, carried out in June, finds that central London office workers are spending an average of 2.7 days per week in the office, less than their counterparts in Paris, New York and Singapore, though pretty similar to those in Sydney and Toronto. As in  those other cities, their office days are concentrated in the middle of the week, with London showing the sharpest drop-off on Fridays, when just 40 per cent are traveling in to work.

London’s sluggish return is explained by two main factors, the report suggests. On the management side, London bosses seem more reluctant than those in other cities to specify when workers need to be in. And while workers and bosses alike value the chance to develop relationships and collaborate in person, London’s workers particularly also appreciate the cost savings and time flexibility offered by working from home – more than those in other cities.

The Centre for Cities findings reflect those of the King’s College Policy Institute’s London Returning survey of 2022. This found that most London workers felt positive about being in the office, but that 80 per cent said that avoiding the commute, its costs and its time demands was a good reason to continue working from home.

London government has sought to address this issue through the “Off Peak Friday” trial that ran from March until May on Underground, Overground, DLR, Elizabeth line and some National Rail services. It led to a modest increase in commuting on Fridays, but awareness and take-up was limited. Speaking at the Centre for Cities launch event on Tuesday evening, Deputy Mayor for Business Howard Dawber said City Hall was still mulling the outcomes of the trial.

However, while London commuting costs are high compared to most of the other cities in the study, I suspect the bigger problem lies outside the capital. On commuter lines beyond Sadiq Khan’s control, both expense – despite the paltry savings offered by flexi season tickets – and chaotic performance, worsened by rolling strikes in recent years, make a trip to London a pricey roll of the dice.

These costs and inconveniences may explain one area where London bucks the trend: in London, unlike the other cities, younger workers were spending most days in the office and saying they work most effectively there. They are also the workers most likely to live in London, while many older ones commute in from the Home Counties – a trend that was accentuated during the pandemic – or at least used to. Anyone who has joined an online call with younger workers balancing laptops on washbasins in shared flats with iffy WiFi while older workers dial in from their immaculately-restored half-timber country cottage may understand why the former are keener than the latter to get back.

At the launch event, panel members Dawber, Kat Hanna (Managing Director at Avison Young) and David Wreford (Partner at Mercer) agreed that the return to the office seemed to have plateaued in London, and that the pandemic had accelerated and intensified trends towards more flexibility. But there was less consensus among panellists and audience members on whether this was a good thing, and about what if anything could be done about it.

A fundamental question was, against the backdrop of government’s “Growth Mission”, how does hybrid working affect productivity? Intriguingly, Return to the Office finds that most workers could see individual productivity benefits from working at home, but were concerned about the long-term impacts on skills, pay and promotion prospects, all of which affect organisational productivity. The skills gap could particularly affect younger workers, unable to learn from working alongside more experienced staff, if the latter continued to stay home for most of the week.

The evidence on productivity is still emerging and tentative, though face-to-face interactions and proximity are the lifeblood of the agglomeration benefits that cities offer – even if these apply more for some teams and some sectors than for others. The report recommends that more research be done on the productivity impacts of hybrid working, but the risk is that we will only know the impacts when looking in the rear-view mirror; that we won’t know what we’ve got till it’s gone. So we need to make some informed judgement calls and watch for early signs of long-term effects.

In the meantime, more flexible working patterns were transforming working life for people with caring responsibilities – generally women, who the London Returning survey found were more positive about working from home and more reluctant to be told to work more days in the office. Reduce flexibility and these workers might once again be excluded from the workforce. The Mercer research confirmed this, Wreford added: women were most likely to switch or stay in jobs as a result of flexible working incentives, while men were more likely to be motivated by financial rewards.

Furthermore, while parts of central London’s economy were struggling with new work patterns, suburban areas might be thriving (though ONS analysis suggests local spending patterns have returned to their pre-Covid levels). And Hanna observed that a broader shift to mixed use might strengthen central London’s offer as a place of leisure, as well as work: “It’s called the Central Activities Zone; that doesn’t tell you what those activities need to be.” While peak hours Tube use remains below 2019 levels, evening and weekend riderships are already higher, suggesting that London’s offer to visitors – short and long distance – is stronger than ever.

Finally, what, if anything, should be done to change the situation? Mayor Khan wants central London to be busy, Dawber said, but can only offer incentives and encouragement. British bosses are reluctant to impose tougher “back to the office” mandates according to the polling, and government policy is pointing in the direction of more flexibility, not less.

So, is this the much discussed “new normal” – neither citypocalypse nor a snap back to the heady days of February 2020? It may be an equilibrium for the moment, but perhaps not a stable one. As panellists noted, climate change and artificial intelligence may dramatically change where, how and by whom office work is performed in the future. We may be only at the beginning of a period of rapid change.

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.

Boomer Boom Bang-a-Bang

London’s population reached a historic high of 8,945,300 in the middle of last year, according to new estimates released by the Office for National Statistics. After slower growth at the end of the 2010s and a slight decline between 2019 and 2021, the number of people living in the city rose by 0.9 per cent – around 75,000 – between 2022 and 2023, the fastest growth rate since 2015-16.

Does this suggest that London has escaped the twin shadows of the Covid-19 pandemic and Brexit and is returning to its turbo-charged growth of the late 2000s and early 2010s? Well, maybe and up to a point.

Certainly, the capital has defied some of the more apocalyptic predictions that emerged during lockdown – of the age of cities stuttering out in an “urban doom loop”. But it is still growing more slowly than other UK regions and metropolitan areas, most of which grew by one per cent or more in 2022-23. London’s growth rate is in fact more like what other regions were experiencing ten years ago, when the capital’s population was surging by 100,000 or more every year – a growth rate of up to 1.4 per cent.

London is also growing a bit more slowly than experts forecast. The mid-2023 estimate is very slightly lower than that of the most cautious Greater London Authority (GLA) population projection, which was based on the 2021 Census and projecting forward the slower growth trends from 2017-21.

Borough patterns suggest a mixture of recovery and longer-term trends. In some places, the return to growth looks like a post-pandemic rebound. This is most notable in Camden, which saw one of the steepest declines in population at the beginning of the pandemic but has now more than recovered, with 2.9 per cent population growth between 2020 and 2023.

But there appear to be broader trends operating too. Hillingdon, Tower Hamlets and Newham have each shown persistent growth, adding at least four per cent to their populations between 2020 and 2023. On the other side of the equation, Lambeth, Lewisham, Haringey and Waltham Forest all have populations that remain two to three per cent below their pre-pandemic levels.

Even if London’s growth has slowed, its population dynamics remain distinct from those of other parts of England and Wales. The capital continues to see much higher international inward migration (around 154,000 in the year to mid-2023) and domestic outward migration (130,000 in the same year) than other regions.

The capital’s population is also buoyed by natural change – the surplus of births over deaths – which accounts for growth of 50,000 in the year to mid-2023. Meanwhile, across England and Wales this has dwindled to nothing or gone into reverse, with as many people dying as being born for the first time in 42 years.

London is still younger than average (both a factor in and a result of its natural growth rate): its median age is 35.9, compared to 40 or older in every other region in England and Wales. The age groups that have seen the fastest growth since the pandemic abated (2021) are people in their twenties and in their sixties. However, longer-term (since 2011) the twenty-something population has declined, and the fastest growth has been among Londoners in their fifties and sixties – maybe those who lucked out by buying property in the 1980s and 1990s.

International comparisons suggest that London is not alone in its population growth patterns. Slow recovery is the norm following Covid, and other large northern hemisphere cities were already seeing a slowdown before 2020. US Census Bureau estimates suggest that in 2023 New York City’s population was still six per cent below its April 2020 total, though population loss is slowing. Paris has also seen a long-term decline, largely as a result of falling birth rates, which accelerated during the pandemic.

Cities have not gone away, but their slow recovery perhaps reflects the unexpected “stickiness” of changes in working habits and a sedate return to international migration patterns. If that is so, London’s slow growth may just be a delayed bounce-back. Comparisons with the GLA projections suggest this might be the case: those projections modelled growth slowing in 2022-23, whereas in fact it speeded up.

It may also be that growth is constrained as the cost of living in the capital remains sky-high and London struggles to meet the London Plan’s housebuilding targets, let alone the more ambitious goals suggested by the last government and think tanks such as Centre for London.

This should be a cause for guarded optimism. If policy and delivery are constraining growth we can turn that round, adopting the “Get Britain Building” mantra of the new government. London can build its way back to sustainable growth as a liveable and exciting destination for UK citizens and international visitors – provided of course that other measures, such as arbitrary immigration restrictions, do not stifle the UK’s world city.

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

Licence too ill

London’s nightlife has been taking a pasting: a recent (not very scientific) survey suggested that the city has the worst nightlife in the UK; pubs and clubs are being closed down, their numbers falling by eight and 30 per cent respectively since 2010 according to UK business counts; industry bodies say that London is losing nightlife faster than other regions; and social media reports frequently bewail empty pubs, dead streets and early closing times.

What is to blame for this thinning out? There is a grim alignment of factors: changing drinking habits, higher prices and constrained wages, staff shortages following Brexit, changed working and commuting patterns following the pandemic, cautious licensing authorities and the rise in take-away (or delivery) culture.

Some critics point the finger at Amy Lamé (pictured, front left), the Night Czar appointed by Sadiq Khan in 2016. How, they ask, can her six-figure salary can be justified when London’s nightlife is crumbling? More recently, Conservative mayoral candidate Susan Hall has weighed in, presenting Lamé’s appointment as symptomatic of Khan’s “chumocracy” approach to administration and promising to bring in “real experts committed to reviving our city’s night economy” if she is elected.

Lamé has mounted a vigorous defence of her record, both in keeping venues open and making nightlife safer for all. And I don’t think it is fair to blame her every time the shutters roll down on another London venue (full disclosure: I don’t really know Lamé, but I did spend many 1990s Saturday nights at Duckie, the arty club night she co-founded). But there is a deeper problem too: neither she nor Khan have access to the levers that can keep venues open or close them.

This seems strange, given the wide-ranging remit of London’s Mayors. Nightlife is an essential part of a city’s economy and culture, but licensing late night entertainment and hospitality remains a local authority function.

Licenses are granted by the 33 local authorities in London and governed by central government policy objectives focused on preventing crime, nuisance and negative impacts on children or public health rather than on fostering cultural or economic vitality.

Furthermore, substantial areas of central London are subject to “cumulative impact” policies, which restrict the opening of new premises and extensions of opening hours in order to minimise strains on local infrastructure and the risks of disorder.

The deck is stacked against the hospitality industry. Some boroughs, such as Camden, have sought to relax policies in response to headwinds that have battered the sector since the pandemic, though this has been controversial. In many other cases, restrictions either haven’t been reviewed since 2020 or have been reaffirmed. At the heart of the issue is a balancing act. How does licensing weigh the concerns of local residents, who vote, against the interests of local businesses and visitors, who don’t, and the representations made by the police, who are in the front line when things go wrong?

There’s a similar challenge in town planning – balancing local community interests and the strategic needs of the city. This is why the Mayor was given powers to set policies on issues such as density and use mix, and to intervene in significant cases where local decisions might undermine those policies. Indeed, Khan has already used his planning powers to support London’s nightlife through the “agent of change principle”, which makes developers rather than pre-existing entertainment venues responsible for sound insulation and other mitigation measures.

Should London’s Mayors, who already have oversight of the capital’s police force, take a greater role in licensing, setting a framework for local decisions and perhaps intervening where there is a strategic case for doing so? Giving them more power in this area could take the heat out of local debates and allow for a more consistent and strategic approach to the capital’s night-time economy.

Such an extension of mayoral power might be restricted to central London, where nightlife serves capital city and world city functions, as well as the needs of local communities. Again, there’s a read-across to town planning: the Mayor already has an enhanced planning role in the Central Activities Zone, though interestingly many of London’s nightlife hotspots are distributed around its fringe.

All that said, licensing is difficult. I’m not sure whether the current Mayor or his successors would welcome responsibility for decisions that almost invariably annoy someone. But if we want London to be a successful, liveable and thriving 24-hour city, intelligent licensing has a vital part to play.

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.

Come together

Interviewed on Radio 4 for the launch of his re-election campaign on Monday, Sadiq Khan said this year offered “a moment of maximum opportunity for Londoners, for there’s the prospect not just of a Labour Mayor, but of a Labour government working together [with a Labour Mayor].”

Even if the tone was more bullish than the Labour leadership might like, Mayor Khan has a point. Since he was first elected in 2016, he has lived with a chaotic kaleidoscope of Conservative governments. When these have shown any interest in the capital, it has generally been to frame it as an overheated reservoir of “wokery”, or to attack Khan’s record on policing and planning – most recently through directing a review of industrial land and opportunity area policy, announced the day before the pre-election period formally began.

Khan’s predecessors were luckier. Ken Livingstone’s first term started with him politically homeless, expelled from Labour for running as an Independent against their official candidate, Frank Dobson. The early days, when I was working in the Mayor’s office, were notably scratchy: Livingstone’s first meeting with Deputy Prime Minister John Prescott was cryogenically chilly, his battle against the London Underground public private partnership poisoned relations with HM Treasury, and I remember the air turning blue as he offered London minister Keith Hill his frank thoughts on provisional spending settlements.

But Livingstone benefitted from coming to power when the public spending taps were being turned on, and when the Labour government led by Tony Blair wanted to show that its new devolutionary settlement was a success. By 2004, following back-channel discussions with Number 10 and a more publicly visible collaboration with culture secretary Tessa Jowell over the London 2012 Olympics bid, he was back in the party.

Buoyed by London’s unexpected success in winning the Games, Livingstone’s second term saw substantial public spending in London, government and parliamentary approval for Crossrail – today’s Elizabeth line – and new legislation that extended the Mayor’s powers on housing, planning, culture and waste.

Boris Johnson benefitted from this legacy following his election in 2008. And from 2010 Livingstone’s Conservative successor had the following winds of a Conservative-led coalition in his sails.

He too secured more powers, through the Localism Act and and the Police Reform and Social Responsibility Act, both passed in 2011. And although London boroughs’ budgets were cut heavily – as were those of other urban councils – the government was surprisingly generous in investing in the Olympic Park legacy, including Johnson’s pet project, Olympicopolis (now East Bank), perhaps aware that just as a successful Olympics can show off a city, a tumbleweed-strewn legacy can show it up.

The only initiative that failed to make any headway was the London Finance Commission, a deliberately non-partisan campaign for fiscal devolution, which was beached on the sands of Treasury insouciance in 2013, and again in 2017 when Khan had a second go.

Khan came to power in spring 2016, as the five years of public spending cuts started to take their toll and the European Union referendum campaign slouched to its self-harming conclusion. The years since have been dominated by a grim procession of crises – Brexit contortions, the Covid pandemic and spiralling inflation – which have seen the Mayor and the government on the opposite sides of arguments, with spending decisions marked by public spats and denunciations rather than the private haggling and public consensus that operates between political allies.

While the “metropolitan elites” of London became useful villains, “levelling up”, the regional policy boondoggle Johnson wielded in the 2019 general election campaign, has little to show by way of results apart from cancelled and delayed projects, funding and tax decisions that do down the capital, and occasional outbreaks of opportunistic culture war posturing.

So Mayor Khan can be forgiven for believing, in words that still carry a faint resonance from the 1990s, that “things can only get better” if he wins a historic third term. Labour have said little about their plans for devolution beyond a promise of legislation and speeches focused on bringing some consistency to the patchwork quilt of devo deals spread across England. Furthermore, the UK’s dismal fiscal outlook suggests that “turning on the taps” of public spending is still a distant prospect. But Labour’s economic growth mission cannot pass over the opportunities London offers.

There could be a golden moment ahead. By the end of the year, a Labour Mayor and a Labour Prime Minister could be simultaneously in post, short of cash but rich in political capital. Starmer and Khan have their differences – on relations with the EU and Green Belt development, for example – but must be able to agree a shopping list of measures that are cheap and capable of having a real impact on growth and prosperity, even if some are controversial.

Such measures might include selected urban extensions in the Green Belt, more fluid European work permit arrangements for young people, performers and professionals, rail devolution in London, and maybe one more push for a system of fiscal devolution that enables London (and other English cities) to manage local taxes and local development.

Sadiq Khan has been quick – on occasion too quick – to point the finger at central government for everything wrong in London. A double win in the capital this year would give Labour a chance to show just how much better the relationship between City Hall and Whitehall could work.

Originally published by OnLondon.

Movin’ on up

London’s universities are big players in the capital’s economy as well as a visible presence on its streets. They account for 85,000 jobs – more than in the advertising, and architecture and engineering sectors, and almost as many as in accountancy and law – and their economic impact has been valued at £27 billion every year.

Our leading universities are truly global institutions: University College London (UCL) and Imperial regularly feature in global “top ten” rankings, and foreign students make up a large proportion of London’s student population – a success in terms of exports and soft power.

But London’s universities also have a good story to tell about their local impact, and in particular their offer to students from less advantaged backgrounds. Two recent exercises, which I reviewed for University of London, have sought to evaluate how the UK’s universities compare in terms of supporting social mobility by attracting and boosting the careers of students from poorer families or places.

Two years ago, the Sutton Trust and the Institute for Fiscal Studies (IFS) analysed how well universities did in attracting students who had been on free school meals at age 16 and how many of these were in high-earning jobs at age 30. The ten highest-performing universities by these measures were all in London, with Queen Mary University of London, University of Westminster and City University of London taking the top three slots.

A slightly different approach was taken by Professor David Phoenix from London South Bank University. His English Social Mobility Index, which has now been published for three consecutive years, looks at how well students from deprived places perform in terms of access to courses, continuation and completion rates, and then earnings and “graduate employment” one year after graduation.

The 2023 index shows Bradford and Aston universities in the top spots but five of the top ten are London institutions: City, King’s College London, London School of Economics and Political Science (LSE), Queen Mary and UCL.

Neither approach is perfect. No, graduate earnings are not the only measure of the value of higher education. Yes, London is at an advantage because graduates who stay in the city will earn higher salaries (even if most of those evaporate in rent and travel costs). And, yes, focusing on the deprivation of places rather than people does not reflect the differing geographies of poverty inside and outside London.

However, the indices do seem to show London universities – both established institutions with global brands and newer former polytechnics – doing relatively well. This is partly because Londoners from poorer backgrounds are more likely to go to university: 44 per cent of London pupils on free school meals go on to university compared to 27 per cent across England, and eight per cent go to more demanding “high tariff” institutions, compared to four per cent across England.

This is partly a tribute to the performance of London schools, which have shifted from being the worst performing in the country to the best over the past 20 years, particularly for pupils from poorer backgrounds.

The reasons for this have been intensively debated, with some analysis pointing to the investment and focus that came with the London Challenge, and others arguing that it is the ethnic make-up of London’s young population that is driving success – put bluntly, white British pupils drag down the results in other parts of the country.

Some of London’s most successful universities certainly have an intake that reflects the high levels of aspiration in many minority communities: Queen Mary, City, LSE, Imperial and Westminster all have disproportionately large intakes of students from UK Asian backgrounds, though fewer universities (East London, West London, London Met and Middlesex) do so well in recruiting UK Black students. These broad categories also gloss over any differences within different groups, for example between Indian and Bangladeshi, and Black Caribbean and Black African students.

But London’s universities also do well in offering courses that attract students from poorer backgrounds, particularly those looking for a stable and well-remunerated career. Pharmacology, computing, law, economics and business offer the strongest social mobility dividend, according to the IFS/Sutton Trust research.

Nineteen of the 20 top courses in these subjects are in London, with Queen Mary and City universities in the vanguard. And universities work to tailor their courses to student circumstances: in interviews for University of London, teaching staff at Queen Mary emphasised the flexible approach they took to timings and teaching approaches to support students with caring responsibilities, of whom they have a relatively high number.

High participation rates in London show how far university attendance has been normalised here for young people from all backgrounds (in contrast to apprenticeships, where the capital has the lowest take-up of any English region). This may partly result from the widespread presence and visibility of universities, but is also driven by the demands of London’s job market: in 2016, 53 per cent of jobs in London were held by someone with a degree, compared to 30 per cent in the rest of the UK; for senior managerial jobs, the proportions are 64 per cent in London and 38 per cent elsewhere.

But it’s not just the managers. People working in administrative or elementary manufacturing roles are also more highly qualified in the capital. These graduates working in such “non-graduate” jobs may account for London having the lowest proportion of graduates saying that their work was meaningful, fitted with their plans and used the skills they developed in university. Scores were particularly low for those graduates who had lived in London before going to university.

So, London universities play an important part in London’s success as a “social mobility hotspot”, showing how access to higher education can be widened for all classes. There may be opportunities to widen the hotspot: universities from across the UK have opened outposts in London; perhaps London universities could work with local partners to open satellites elsewhere. However, low job satisfaction levels for London graduates also suggests that more needs to be done outside universities, to make work fulfilling for all and to help young Londoners to access a diverse range of post-18 education and training.

Originally publcished by OnLondon