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London housing crisis examined as new homes slip down Sadiq Khan’s list of pledges for 2021 mayoral election

Jonathan Prynn
·5-min read
<p>Unfinished business: Sadiq Khan on the site of a development in Southwark earlier on in his mayoralty</p> (Alex Lentati)

Unfinished business: Sadiq Khan on the site of a development in Southwark earlier on in his mayoralty

(Alex Lentati)

The Mayoral election of five years ago was widely described as a referendum on housing. Voters were asked whether Sadiq Khan or Zac Goldsmith was the candidate to put right the crisis seen as the single greatest obstacle to London’s future growth and prosperity.

In the ballot box they decisively chose the Labour man born on a council estate in Earlsfield over the Tory raised on a Georgian estate in Ham.

Half a decade on the Mayor’s team point to record levels of “genuinely affordable” housing starts, a renewed programme of council house building with more than 3,000 under way last year with GLA funding.

There is particular pride in the level of affordable homes being delivered in new housing schemes, which has increased from 25 per cent when Mr Khan took over from Boris Johnson, to 37 per cent last year.

But even the Mayor’s diehard supporters would struggle to argue that he has cracked the housing crisis in London. According to figures from the charity Trust for London the number of households in temporary accommodation hit 60,000 last year for the first time since 2006 and the total has been rising through the Mayor’s extended term.

According to a senior figure at one housing charity “it is completely fair to say that London remains in a disastrous place and has been getting worse over more than a decade”.

There is also little sign that Mr Khan’s 2016 pledge to prevent Londoners from being “priced out of our city” has made much progress. The property market is at an all-time high, averaging £501,320 according to Land Registry figures, up seven per cent on the £467,485 when he assumed office.

This leaves the bottom rung of the housing ladder way out of reach for hundreds of thousands of younger “generation rent” workers who do not qualify for subsidised housing.

London rents have fallen since the start of the pandemic but only because so many tenants have lost their jobs or are on reduced wages. For the majority, the landlord’s monthly take still leaves them with little left over for a deposit.

The Mayor’s Tory critics claim that his record on affordable housing has been well short of what was originally promised — given the near £5 billion of funding already stumped up by the taxpayer — with another £4 billion on the way for the next five years.

They say that an initial pledge to start work on 116,000 homes by 2022 — a deadline pushed out to 2023 as a result of the pandemic — has not come close to being met. So far work has started on 56,239 houses and flats subsidised by the GLA. They also point to the long lag and slower delivery of completions.

By that measure the Mayor has only delivered 28,657 new affordable properties during his first four and a half years year in office compared with the 39,935 completed during Mr Johnson’s second four-year term.

A source close to Housing Secretary Robert Jenrick said: “Sadiq has been an obstacle to constructing new housing while watering his own building targets down as Mayor to save face. He’s badly let down Londoners and created massive pressure for housing in the wider south east as building has stalled in the capital.”

For the Mayor and his advisers this is nonsense. They say that last year’s 17,256 starts were the highest since detailed GLA records began in 2003. They also point out that the Mayor pivoted from a controversial definition of affordable that set rents at up to 80 per cent of market rates to a far more heavily subsidised housing model aimed at those most at risk of homelessness.

They insist that the Mayor has fulfilled his side of the bargain, but is held back by inadequate Government funding. According to GLA research nearly £5 billion of Government cash will be needed each year to solve the housing crisis in London, more than City Hall is being offered for the full five-year term.

They also point out that London’s slice of the national housing pie has gone down from 50 per cent to 35 per cent.

Headwinds also include the fallout from the Grenfell disaster. Other factors outside the Mayor’s control include rising construction costs. Plans for building 10,000 homes on TfL land have also been slower coming to fruition, in part because of its own funding crisis since the pandemic hit. For some critics Mr Khan’s failure has been his inability to raise his gaze from the political weeds of affordable housing targets to address the complex longer-term challenge of how London will accommodate its population.

Kath Scanlon, policy fellow at LSE London, said: “The basic problem is that the number of homes being built is still nowhere near the number that everyone says is needed. People have scratched their heads about what that number is but whether it’s 52,000, 66,000 or 100,000 it is still way beyond what has been produced.”

Like many experts she believes the only hope of solving the housing crisis is grasping the politically toxic nettle of more building on the green belt. But Khan’s 2021 manifesto makes it clear that the green belt remains sacrosanct.

Instead his manifesto for 2021 promises largely more of the same, with 82,000 new affordable homes pledged. Intriguingly, housing is second from last on Khan’s line-up of manifesto commitments, whereas “tackle the housing crisis” was number one on the “to do” list last time round.

Mr Khan always maintained that fixing housing in London was a marathon not a sprint. But it may well prove to be worse than that, a race that no Mayor can ever hope to finish.

The funding and powers available to the occupant of City Hall are simply not up to the job. Like his predecessors Sadiq Khan has done the best he can — but London’s chronic housing crisis has not gone away.