The promise of London’s new mayor, Sadiq Khan, to build 50,000 homes (half of them affordable) with a reasonable commute is being heralded but also questioned.
Jeremy Castle, director of the London planning and development team of Deloitte Real Estate, says Khan is likely to face a tough time combining these goals, with potential conflict arising from his pledge to cap transport fares and to build thousands of homes on Transport for London’s extensive land portfolio.
Although London boroughs have previously approved enough planning permits to meet the 50,000-per-year target, most homes don’t get built. “The challenge—if you work on the basis that roughly 50% of each year’s planning manifests into built homes—is to grant more planning permission,” Castle says, “or find ways of delivering the ones that have been approved, but construction [is held up]. There’s no quick fix.”
Castle says Khan needs to engage a variety of different stakeholders in the process. “We often see campaign ideas that might rule out or reduce reliance on one group or another,” he says. “Ensuring that major house builders are fully bought into the vision will help enormously.”
Khan has indicated that he would be open to major employers’ providing partial financing for new builds in exchange for some homes set aside for their workers. Castle applauds such creative ways to retain talent in the capital. He says Deloitte entered into an agreement with the owners of the East Village at the Queen Elizabeth Olympic Park to provide accommodation for new hires who have recently graduated and often struggle to find affordable housing in central London.
“From an affordability issue, it’s partly increasing supply in ways that reduce home prices, but also offering a wide range—not just homes for sale, but also rented accommodation,” he says. “I also applaud [Khan’s] desire for high-quality design to maintain London’s standing as a world-class city.”