Assembly highlights weaknesses in Mayor’s Housing Strategy

02 April 2014

The London Assembly today highlighted significant weaknesses in Mayor Boris Johnson’s Housing Strategy that mean it will fail to address existing housing demand nor meet the needs of London’s expanding population.

The Housing Strategy provides no substantive detail of how the Mayor expects the market will meet his target of building 42,000 homes a year over the next 25 years, does little to provide genuinely affordable rented accommodation, ignores the need for reform of the private rented sector and misses the opportunity to incentivise the construction of much needed family sized houses.

Tom Copley AM, who proposed the motion, said:

“With the average home in the capital soon to cost half a million pounds, for most Londoners property ownership is little more than a distant dream. The majority of us living in rented accommodation face constant uncertainty living at the whim of our landlords.

“The Mayor’s Housing Strategy suggests he is the only person left in London who doesn’t understand the extent to which the market has failed, is failing and, without bold action, will continue to fail to adequately meet the needs of millions living in London.”

Jenny Jones AM, who seconded the motion, said:

“Without firm action from the Mayor people in low paid jobs will be driven out of central London. They will be hit by a double whammy, the financial cost of longer journeys to work and the social cost of having less time to spend with their children. As a society we must act to address the capital’s drastic housing shortage, it’s a shame the Mayor has yet again lacked the ambition our city needs.”

The full text of the motion is:

That the Assembly notes the Draft Housing Strategy.

Further, this Assembly notes that total housing completions fell to 21,000 in 2012/13; an even lower number than during the financial crisis. This means that to achieve the target set out in the Draft Housing Strategy, London requires more than a doubling of current delivery levels. Since the de facto prohibition on public-sector house building (via local authorities) was introduced in the 1980s, the market has never provided sufficient supply of housing to meet demand and the Mayor’s Draft Housing Strategy provides no substantive route-map to how the market will meet the Mayor’s target of 42,000 homes a year for the next 25 years[4].

To correct the market failure that afflicts the provision of an adequate supply of new homes, this Assembly believes that the GLA should itself intervene directly in the housing market by establishing a London Housing Corporation to commission the construction of new homes. This approach should be reflected in the final iteration of the Mayor’s Housing Strategy.

Of the Mayor’s Draft Housing Strategy target to build 42,000 new homes per year, the aim is that more than half (22,000) will be homes for market sale, while that only 10.7% of all new homes in London should be charged at or around target/social rent levels – a further proportion will be charged at the higher end of the Government’s ‘Affordable Rent’ product, charged at up to the maximum of 80% of market rent [5].

This Assembly believes that such a low number of homes at genuinely affordable rent levels fails to allocate sufficient housing for those on low-incomes. Given the unique characteristics of London’s housing market and the consequence this has for rent levels, this Assembly rejects the Government’s definition of ‘Affordable Rent’ and calls on the Mayor to, as a minimum, reallocate the proportion of his housing target reserved for ‘Affordable Rent’ to the lower rent category outlined in the Draft Housing Strategy.

This Assembly rejects the Draft Housing Strategy’s policy that family-sized housing constitutes “three or more bedrooms”[6]. This policy does little to incentivise the construction of affordable housing with four, five or even six bedrooms. This is despite the undoubted need for such larger properties. This Assembly therefore believes that the Draft Housing Strategy should outline a set of separate targets for larger affordable homes above three bedrooms.

This Assembly believes the Mayor should bring forward proposals for rent stabilisation in London’s private rented sector and seek the relevant statutory approval to pilot such a mechanism in London. This study should examine foreign comparisons – most notably Germany and Switzerland – where stable rent policies have resulted in much larger and better functioning private rented sectors than currently enjoyed by Londoners.

This Assembly believes that there is insufficient evidence to support the Mayor’s claim that overseas investment in London residential property makes, on balance, a positive contribution to addressing London’s housing crisis. The Assembly therefore believes that the Draft Housing Strategy should be revised to take account of the latest objective research on the matter and commission research by the GLA into the practice of overseas investment in London’s housing market.

Taking in to account the serious misgivings outlined, the Assembly hereby resolves to reject the Mayor’s draft housing strategy.

Notes to editors

  1. The motion was agreed by 15 votes for to 9 against at a meeting of the full Assembly today.
  2. Under the provisions of Section 42 of the Greater London Authority Act 1999 (as amended), the Assembly has the power to consider and potentially reject draft strategies within 21 days of their publication, including the date the draft strategy is laid before the Assembly. A draft strategy is rejected if two-thirds of Assembly Members present and vote to do so. As today’s vote did not reach the two-thirds threshold the Housing Strategy is deemed approved.
  3. Watch the webcast.
  4. ‘Homes for London: The London Housing Strategy, Draft for Consultation’, November 2013, p.16
  5. Ibid
  6. Ibid
  7. As well as investigating issues that matter to Londoners, the London Assembly acts as a check and a balance on the Mayor.