London’s new housing targets do not reflect the capital’s true housing needs and, despite a rise in the number of planning consents, development will peak soon, suggests new data from Savills.
The latest London Plan, drafted by mayor of London Sadiq Khan, sets a target of 52,000 homes per year. This falls far short of the government’s 72,000 calculation of London’s housing need, and Savills’ 95,000 figure for uncapped housing need – a calculation of the level of housing supply needed to bring down prices to a more affordable level.
Although housing consents have been rising in recent years — jumping 42% between 2015 and 2018 — Savills expects completions to peak in 2021 and 2022 before tailing off in 2023.
This is due to “a significant slowdown in starts” between 2017 and 2019. On top of this, a significant number of homes being finished will be prime – not affordable – homes costing more than £1,000/sq ft.
“The headline is the real mismatch between assessment of need and what’s being delivered,” says Emily Williams, associate director of residential research at Savills in London.
Last week, in a scathing letter to the mayor, Robert Jenrick, secretary of state for housing, communities and local government, took Khan to task for setting targets in the London plan that fell below the government calculation of London housing needs.
Williams admits that it would be hard to boost London’s supply of housing to meet Savills’ figure for uncapped housing need.
She adds: “It’s hard to see how London can meet its needs within its own boundaries. That means considering releasing land in London’s green belt to help tackle the problem. There’s lots of potential around train stations in the green belt. It could support more housing.”