Mayoral Election Issues: The Housing Shortage

roofer colourThe population is 8.6 million and the city is struggling with a shortage of housing.  Sounds familiar?  While this describes London today it also portrays the capital in the late 1930s.

After a post-war decline, the population has just got back to the 30s peak and a housing crisis has come back too.  So what has happened to house building in the intervening years? How did London find itself with a similar problem?

First, a bit of urban history. The shape of the capital has changed. In 1939 far more people lived in central London – 4.4 million lived in inner boroughs while 4.1 lived in outer ones[1].  The most highly populated areas were Southwark, Tower Hamlets and Lambeth, and can be seen as the darker areas on the map.

House bulding map 1-2

By 2015, the population of inner boroughs had fallen by 1 million while the outer boroughs have swelled by 24% to 5.1 million.  The most highly populated areas today are Barnet, Croydon and Ealing.

House building map 2-2

This switch in population from inner to outer came about because of house building.  The population surge of the 30s was met with a surge in building, and most of it took place in outer areas[2].

House building chart 3-2

This lure of new housing in the suburbs and the loss of central London housing in the Blitz helped reshape the capital.

In the last decade fewer homes were built than in the 1960s and 70s, when the population was shrinking. House-building has failed to keep pace with the population.

Since 2002 London has seen a 21% increase in jobs and a 16% rise in population. Over the same period new homes have increased by 11%[3].

House building chart 4-2

The 11% figure disguises a stark difference between inner and outer boroughs and where those homes have been built. Data from the Department for Communities and Local Government shows that there has been a 37% increase in the number of homes in Tower Hamlets since 2001 and a 20% increase in Islington. But in the same period the growth rate in dwellings in 16 outer boroughs has been in single figures – with just 4% in Sutton and 2% in Merton.

house buidling map 5-2

This pattern of growth is a reversal of what happened through most of the 20th century when more than half of the new housing stock was provided in the outer boroughs.

This growth in inner areas is not uniform however. 28% of the housing stock in Tower Hamlets was built this century, the highest proportion anywhere in the UK. It has the space through the redevelopment of areas like Canary Wharf and Limehouse.  Kensington and Chelsea in contrast has seen a 2% growth in homes due to the lack of brownfield sites.

The building in inner London means these areas are becoming more densely packed. Housing density is measured in dwellings per hectare. The average for England as a whole is 1.8. The average rate for London is 21.5[4]. For Inner London it is more than double that again at 44.6. And for Kensington and Chelsea, the borough with London’s highest, it is 69.1 dwelling per hectare.  The lowest density is Havering with 8.7 dwellings per hectare.  Havering is 10 times larger than Kensington and Chelsea. If it were to have the same dwelling density as the Royal borough it would have nearly 800,000 homes not the 100,000 it has currently.

As in the 1930s, the location of home building is pulling the population.  The biggest rate of growth in the past 12 months is in the City of London, but the numbers are small. After that it is Tower Hamlets where there has been at a 2.3% rise in residents in a year.

The GLA’s forecast for the next 25 years[5] shows that Tower Hamlets will lead the growth in residents, closely followed by Newham as many head east in search of a home.

House buidling map 6-2

But can building keep pace with demand?   New home starts are climbing back towards where they were 10 years ago, but it is still not enough and the problem is widely acknowledged. In his housing strategy document last year[6], the outgoing Mayor, Boris Johnson, said that housing was an “epic challenge” and that the number of new homes being built in the capital would need to double to 42,000 per year for the next 20 years to keep pace with population growth.

House building in the capital has been bumping along at around the 20,000 level for the past 10 years[7]. Following the financial crisis of 2008 it dipped sharply.

House building chart 7-2

Most of the homes being built are in the private sector, not social housing, which raises issues about affordability. Even in the ‘affordable’ sector a shift has taken place.

More affordable housing was delivered in London in the 2014-15 financial year than for any period dating back to 1991[8]. 17,913 homes were built or acquired and made available (so not counted in the new starts chart above) in the affordable rented sector, according to data from the Department for Communities and Local Government, and the GLA.

Affordable rents were previously available through what was termed social housing. This is rented property provided by a council or a housing association with long, secure tenancies and rents at around 50% of the market rates.

Housing associations also provided Intermediate rental.  This gives a tenant a subsidised rent, usually around 60% of the market rate, while they save for a deposit to buy the property.

In 2010 the government introduced a new category, which it confusingly called Affordable Rent.  This aimed to give social landlords a route to maintaining or increasing the amount of lower cost rental while relying less on public funding. It allows them to charge more and have less restrictive tenancies.  Affordable Rent properties can charge up to 80% of the market rate.

It is this sector that has taken off in the past year, increasing the amount of affordable housing, but the amount of Social Rent housing has declined sharply since AR was introduced.  And this is not due to the building of new stock alone. Some Social Rent property is re-classified as Affordable Rent when it becomes vacant.

House building chart 8-2

The last time the delivery of affordable housing was at this level was in 2011-12.  In that year a comparable number of Intermediate Rent properties were made available.  But there were 11,374 Social Rent homes. In 2014-15 that had been reduced to 3,053[9].

All candidates are making pledges about houses but perhaps the voters’ decisions on the housing issue comes down to the answers to 3 simple questions.  How many houses will you build, what sort of homes will they be and where will you build them?

Sources

[1] http://data.london.gov.uk/dataset/population-change-1939-2015

[2] http://data.london.gov.uk/dataset/housing-london

[3] http://data.london.gov.uk/dataset/number-and-density-of-dwellings-by-borough

[4] http://data.london.gov.uk/dataset/number-and-density-of-dwellings-by-borough

[5] http://data.london.gov.uk/dataset/population-change-1939-2015

[6] https://www.london.gov.uk/what-we-do/housing-and-land/housing-strategy/mayors-housing-strategy

[7] http://data.london.gov.uk/dataset/housing-london

[8] http://data.london.gov.uk/dataset/housing-london

[9] http://data.london.gov.uk/dataset/housing-london

This report was produced in association with London Live’s election special programme London Votes

 

 

The jobs success and housing failure causing a crisis for the capital

roofer colourIn his speech to the Conservative Party conference the Prime Minister, David Cameron, called for a house building “crusade” to deal with the shortage of homes. Nowhere is this felt more severely than in the capital where the success in jobs growth but the failure in house building has led to a structural shortfall.

Since 2002 London has seen a 21% increase in jobs and a 16% rise in population. Over the same period new homes have increased by 10%. And the pressure on housing will continue as London’s population forecast suggests it will grow at 100,000 a year for the next decade.

Housing growth jobs

House building in the capital has been bumping along at around the 20,000 level for the past 10 years. Following the financial crisis of 2008 it dipped sharply. Most of the homes being built are in the private sector, not social housing, which raises issues about affordability.

Housing growth starts

New home starts are climbing back towards where they were 10 years ago, but it is still not enough and the problem is widely acknowledged. In his housing strategy document last year the Mayor of London, Boris Johnson, said that housing was an epic challenge and that the number of new homes being built in the capital would need to double to 42,000 per year for the next 20 years to keep pace with population growth.

The problem in London is more severe than in other comparable cities. Annualised figures for population growth and home building over the past decade show Tokyo and New York in housing surplus, while Paris has an annual shortfall but not to the same level as London

Housing growth cities-2

London relies heavily on housing stock from the last century and before, as reported by Urbs London. A quarter of the homes were built before 1900. Outer London saw a huge house-building boom in the 1920s and 30s but in recent years there has been very little increase in these areas. Figures from the Department for Communities and Local Government, reported by Urbs, show that since 2000 there has been a 11% increase in new dwellings across London (both new builds and conversions) but in 16 outer boroughs this growth is in single figures with just 4% in Sutton and 2% in Merton.

A survey carried out by the housing charity, Shelter, earlier this year showed that most people in London support the building of new homes in their area. And the number of Londoners who strongly support new building was much higher than in England as a whole.

Housing growth support

Despite the political ambition to build and the apparent public support for it, the housing shortfall that London needs to make up will mean that availability and affordability will continue to be severe problems for years to come, and the issue is likely to be a significant battleground in the election for the next Mayor in May 2016.

Source data

See also

Living in the past: The old housing keeping a roof over our heads

More homes packed into built up inner city as growth stalls in outer areas

Booming population will struggle to find a place to live

 

As Boris enter his final months, how happy have we been with the Mayor?

Boris Johnson-2The Mayor appears to be as popular today as he was on the day he was first elected in May 2008. Alexander Boris de Pfeffel Johnson, or Boris as the city knows him, won 53.2% of the vote to beat Labour’s Ken Livingstone to the job over 7 years ago. His satisfaction rating last month, according to GLA polling, was 53%.

For an elected politician to maintain his rating with the public might be seen as something of an achievement, but there have been a few peaks and troughs along the way. The GLA has been commissioning the polling company ICM to ask questions of a panel of 1,000 Londoners since April 2009 and in each poll they ask about satisfaction with the Mayor.

Back in April 2009 Boris was less than a year into the role and his satisfaction rating had risen slightly above his share of the vote to 55%. But 12 months later things were on the slide. In March 2010 he hit his rating low point with just 49% of survey respondents saying they were satisfied or fairly satisfied with the job he was doing.

That job, as London’s chief executive is defined as promoting economic development and wealth creation, social development, and improvement of the environment. He also has responsibilities for culture and tourism.

March 2010 was the only time in the polling that the Mayor’s rating has dipped below 50%. He was re-elected to office in May 2012, though his share of the vote was shaved to 51.5%.

Boris popularity

 

But help was on the horizon in the shape of the London Olympics. His prominent role led to a huge ratings boost and his highest score of 64% satisfied with the job he was doing was achieved in the autumn after the Olympics.

Boris has now descended from those Olympian heights and is currently sitting at 53% again. He will leave office next spring and the battle lines are being drawn to replace him with the election in May. The survey data over the past 6 years shows that the Mayor’s popularity tends to dip during the 2nd quarter of the year – April to June.

Boris per Q

Whether that dip will have an impact on the man who wants to carry the Conservative flag after the Mayor, Zac Goldsmith, or whether it impacts all politician, including Labour’s Sadiq Khan, the Lib Dem Caroline Pidgeon, the Greens’ Sian Berry and the 4 other candidates, is not clear.

One thing is certain from London’s relationship with the Mayor however – after a Ken and a Boris, whoever gets the job will need to be high profile enough that just a first name will do.

Source data

See also

Lib Dem’s London collapse a consolation prize for Labour

Financial sector’s post election confidence helps city pip NY to top ranking