London housing crisis ‘worst I’ve ever seen’ Assembly hears

London housing crisis ‘worst I’ve ever seen’ Assembly hears

Housing association and council housing chiefs joined forces today to issue further grim warnings about the scale of the capital’s housing crisis, as the London Assembly’s housing committee met to consider Sadiq Khan’s progress with building affordable homes.

“If there was ever a time that local authorities and housing association should be building more homes it is now. The amount of money we are spending managing homelessness across London is ridiculous,” Brent council’s housing director Hakeen Osinaike told Assembly members. “The situation is really, really dire.”

“In London we are on our knees in terms of our housing crisis,” added Fiona Fletcher-Smith (pictured), L&Q housing association chief and chair of the G15 grouping of major housing associations in the city. “I’ve worked in this sector for 35 years and this is the worse I’ve ever seen it.”

London’s local authorities are “burning through” some £60 million a month keeping more and more homeless families in temporary accommodation, including one in 23 London children, the committee heard, while a cocktail of government delay, shortage of funds, interest rate hikes and inflationary pressures – ranging from 25 per cent to 43 per cent on construction costs – is stifling supply.

That was the context, said Mayor Khan’s deputy mayor for housing Tom Copley, in which City Hall’s target for new homes under its  government-funded Affordable Homes Programme for 2021 to 2026 had been forced down from 35,000 new home starts to between 23,900 and 27,100.

Whitehall delays in signing off the details of the programme had seen it finally approved only in October last year, he said. “And by then the world had changed. Costs had massively increased and the economy was in a much worse state.” The government therefore “re-profiled” the £4 billion programme, with the new lower targets finally confirmed only in July, allowing individual bids to be agreed.

The totals were also down on the previous 2016 to 2023 programme’s successfully achieved 116,000 home target, Copley said, because of a greater focus, backed by levelling up secretary Michael Gove, on homes for social rent. They are more expensive to deliver than other affordable tenures, but also the “most important” for meeting need.

There are other pressures too, the committee heard, including a delay in government guidance about which schemes would require second staircases for fire safety, which Copley said was currently “killing” development. This has been in addition to other safety works and Whitehall-imposed caps on rent increases already diverting funds from investment, plus uncertainty about what alternatives to gas boilers the government will prescribe for new buildings.

L&Q, the second largest association in the G15 with more than 100,000 homes, spent £450 million last year on fire safety works. In the current affordable housing programme it has bid to build just 1,000 new homes compared to 11,000 in the previous programme, said Fletcher-Smith. “We are paying more to contractors but getting less rent in,” Osinaike said, with councils’ ability to borrow constrained.

With increasing forecasts of a housebuilding slowdown across all sectors, Copley reminded the committee that Khan has already reconvened his London housing delivery taskforce, bringing councils and housing associations together with developers and construction bodies, and called on the government to put in a further £2.2 billion to get the London programme total back to 35,000.

The London Partnership Board, the successor to the recovery board established during the Covid pandemic, which brings together public, private and community bodies from across the capital, is also working on making the wider economic case for investment in housing in London, said Fletcher-Smith.

A report to this week’s meeting of the board cited “widespread agreement amongst stakeholders that London’s housing crisis is currently at its worst state in recent memory”, with the capital now the “epicentre” of escalating homelessness nationally.

It proposed coordinating a “steady drumbeat of messages” ahead of the likely next milestone for public spending decisions, the comprehensive spending review expected after the general election, which would highlight the economic benefits of housing investment for generating jobs, productivity and overall growth, and for saving money on public services and benefits.

“We do need a change,” Copley concluded. “We spend so much money firefighting the consequences of poor housing. Let’s get some of that spend upfront to actually deliver bricks and mortar. It can’t be that we can’t do any better than this as a country.”

Watch the housing committee meeting in full here. X/Twitter Charles Wright and On London. If you value On London’s work, become a supporter or a paid subscriber to publisher and editor Dave Hill’s personal Substack for just £5 a month or £50 a year. Thank you.

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