Sadiq Khan, the new London Mayor, says that his biggest priority is to build thousands more homes every year. “Our capital needs more than 50,000 new homes a year – yet Boris Johnson built barely half that number.” He also vows to create a living rent and improve the private rented sector in the Capital. This sounds good, most property professionals would agree… but is it possible?
Miles Gibson, Head of UK Research, CBRE UK said, There are key areas, specifically housing planning, investment in infrastructure and ensuring London’s placemaking continues to be world class, which must be capitalised upon if it is to prove a successful term in office.
“To date there has been little detail on how the new Mayor’s manifesto will be funded, in particular the infrastructure investment and proposed surface transport improvements. It’s the detail behind these numbers which is most eagerly anticipated by the property industry.”
Adam Challis, Head of JLL Residential Research, said, “Sadiq Khan has said he will introduce a 50 per cent affordable housing target for new developments, and use mayoral planning powers to stop ‘buy-to-leave.’ He also vowed to stop homes being sold off in advance to foreign investors. In reality, however, there is little evidence of ‘buy to leave’ actually happening, and restricting demand is a quick way to compromise the viability and deliverability of new developments. The industry is already signed up to the mayor’s ‘London first’ concordat for sales, which commits to give Londoners first option on new homes in the capital and which we wholeheartedly support.
“Sadiq has a number of other plans revolving around creating a living rent, setting up a not-for-profit lettings agency and introducing a landlord licensing scheme. All of these policies may be beneficial, but cost, process and regulatory challenges would pose hurdles to overcome.”
Shane Ballard, Director at Greene & Co. says, “The Capital sorely needs real and achievable solutions to solve its housing crisis. His manifesto prioritises housing, but it’s an ambitious target given that over the past eight years, Boris Johnson only managed an average of 23,840 homes per year.
“At the heart of Sadiq’s manifesto is a focus on affordable housing and, he is looking to ensure that 50 per cent of all new homes built are truly affordable. While this is a laudable aim, it will be difficult to achieve as it will directly affect the profits of housebuilders. As a result, we may find they adjust their business plans and opt instead to develop homes outside of the Capital, further impacting the London crisis.
“It is my hope that when we review Sadiq Khan’s effectiveness in 2020 we find that his fresh approach has indeed solved our housing crisis, but at present the jury is well and truly out.”
Andrew F. Reeves, Managing Director of central London estate agents, Andrew Reeves, says, “London’s Private Rented Sector would have benefitted more from Zac Goldsmith’s policies and approach, than from Sadiq Khan’s. Firstly, I expect the supply side to suffer should Mr Khan propose any form of ‘rent control’; the UK moved away from that nearly 30 years’ ago with the 1988 Housing Act. The resulting recovery of the sector, with thousands more rental properties becoming available, has been plain for all to see, and has helped to lift the burden of housing provision off the shoulders of local and national government – until now.
“Should the number of available rental properties now begin to decline because investor landlords are frightened off by talk of rent controls, private sector rents will inevitably rise even further.
“There are several other ways of solving the Capital’s ever-growing housing problem, but attacking private landlords is crazy and would be totally counter-productive.”
The National Landlords Association (NLA) welcomed Sadiq with a challenge: To use just a fraction of his £17bn budget to help support London’s PRS.
“Private landlords provide more than 860,000 homes for the people of London, working in the Capital on wages which are unlikely to ever allow them to buy. Without the private rented sector the public services and businesses could not fill their vacancies.
Despite this we have seen little from this election campaign that demonstrates anything but disdain for private landlords and the homes they provide. We call upon Mr Khan to work with the NLA to achieve a targeted crackdown on criminal landlords.
Criminals will not sign up to costs licensing schemes, the Mayor’s priority must be funding targeted enforcement programmes resulting in tangible benefits for local communities.
CEO Richard Lambert (left) said, “The NLA welcomes the election of Sadiq Khan as Mayor of London and looks forward to meeting him to discuss the crisis facing many Londoners seeking affordable, high quality accommodation.”