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London housing shortfall set to worsen, warns thinktank

The gap between housing need and delivery in the capital is set to widen as the new London Plan is developed, a thinktank has said.

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London housing shortfall set to worsen, warns thinktank

In a report published today, progressive research unit the Institute for Public Policy Research (IPPR) also warned that low-cost homeownership products in London are unaffordable for people on modest incomes.

It called for government to withdraw subsidy for London Help to Buy and give City Hall extra cash and powers to support affordable housing delivery.

As well as the new London Plan, the government’s new standardised methodology for assessing housing need will raise targets increasing the delivery shortfall, according to the report.

London mayor Sadiq Khan’s annual monitoring report found in July that net affordable housing provision in 2015/16 was well below the target and down on the previous year.

And Inside Housing reported in April that the Greater London Authority’s (GLA) housebuilding target was likely to be hiked due to historic failures to keep up with demand.


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The report raises “questions about the affordability” of shared ownership and Help to Buy, “as well as the effectiveness of these options in scaling up into homeownership”.

It claims the subsidised Help to Buy equity loan is “benefiting those who are able to afford a home without support”.

A couple with a child, with one adult working full-time and the other part-time on low earnings, would find all lower-cost homeownership products unaffordable, analysis reveals.

Similar families on middle earnings would be able to reach shared ownership in just six London boroughs and Help to Buy in only one.

Shared ownership becomes affordable on an annual household income of £66,000.

The report recommended that the government increase capital subsidy to the GLA to spend on affordable housing, gradually replacing grant with devolved powers for the mayor to set, and keep property taxes.

It also called for a new income-linked measure of affordability and reforms of compulsory purchase orders to help councils buy land at cheaper rates.

“IPPR’s new research sets out the true scale of the housing crisis affecting our city with homeownership out of reach for too many Londoners,” a spokesperson for City Hall said.

“[The mayor] is doing everything in his power to tackle the issue head on by investing a record £3.15bn in 90,000 affordable homes and pushing City Hall powers to their limits by taking a more interventionist approach on land to build more affordable homes.

“But the government must play its part by giving London greater powers and control over resources our city generates to lead a real step change in the number of homes being built in the capital.”

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