Much of the focus of the forthcoming London mayoral election has been the issue of solving London’s housing crisis. As London expands, demand for property and property values in the capital have soared. With rental prices at an all time high and an average property being worth upwards of £500,000 compared to a national average around £200,000. In October 2015 a report from the investment bank UBS stated that London property was the most overvalued in the world, with London and close runner up Hong Kong as bubble risks.
While the outgoing mayor has widely been seen to have ignored the issue ,the current roster of candidates have been more than keen to place the issue at the top of their priorities
Proposals from the candidates
At the helm of the Conservative Party’s campaign to keep hold of City Hall is Zac Goldsmith. Known for his commitment to his constituency and his impassioned stance on green issues, Zac, has made the following pledges regarding property in London:
- To double home building to 50,000 a year by 2020
- Give Londoners the first chance to buy new homes built in London
- Ensure a significant proportion of all new homes are for rent and not for sale
While these pledges appear do demonstrate a shift in the current mayor’s policy regarding housing in London and aims to build 50,000 new houses a year by 2020 are positive there are clear gaps within Zac’s plans to solve London’s housing crisis, not least the issue of funding. Most importantly, these plans fail to deliver on affordable rental properties other than stating that a significant proportion (undefined as of yet) of properties should be rental only.While Zac was quoted in The Guardian as wishing to table an amendment to ensure “ local authorities … build two affordable homes for every one they sell off in London”, this has not formed a manifesto pledge . Overall, Zac’s plans to solve London’s housing crisis fail to deliver any the significant changes beyond current Conservative policy in this area and this could fatally damage his campaign.
The Labour Party’s candidate, Sadiq Khan has equally placed the housing crisis at the forefront of his campaign, having been quoted as saying that the upcoming election will be a “Referendum on Tory housing policy”. Unlike Zac Goldsmith, Sadiq Khan’s manifesto pledges greater investment than the conservatives and solutions for funding.
- Imposing a 50% affordable housing target for new development
- Prioritising first time buyers over foreign investors
- Investing the affordable homes budget to help housing associations build a minimum of 80,000 new homes a year.
- Using publicly owned land in London to develop land
- To create affordable housing with rent based on a third of the average local income (i.e. In lewisham where the average earnings are at 2000 to have rents capped at £700pcm )
- To establish a London wide NFP lettings agency for long term stable tenancies
- Naming and shaming bad landlords through landlord licensing schemes
- To fund the above schemes with London home bonds and pension fund investment.
Sadiq’s plan for London is a lot more substantive than that of his rival. While its aims are amicable and a number of its goals are achievable (e.g. Using publicly owned land to develop affordable housing), it is questionable whether other pledges are. It unlikely that the next mayor of London will have the power to raise funds through bonds and pension schemes and equally it is questionable whether investors will buy into it. Equally, while the idea of rent caps on affordable housing would be beneficial to low income workers, private investors will be less than willing to invest in property, if it is to be rented out at substantially less than the market rate. In spite of this, Sadiq’s campaign demonstrates a greater understanding of the needs to invest in affordable housing for Londoners and while certain policies require greater clarity, the Labour Party poses a very real threat to the chances of the Conservative Party’s hold of London mayoral power.