27 Feb 2018

Could Mayor Sadiq Khan’s Draft London Plan be a model for the UK?

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Could Mayor Sadiq Khan’s Draft London Plan be a model for the UK?

Sadiq Khan’s Draft London Plan could hold lessons for all of us, at least for our cities anyway. We know the housing market is broken in this country. Government knows it, first time buyers know it, savers know it and even home-owners now know it when they consider the cost of moving.

In fact, I think it’s safe to say that between extortionate house prices and stagnant wage growth the traditional property ladder has collapsed.

Once the accepted route to more suitable, spacious or higher-end homes, many people just can’t afford the jumps from one price bracket to another. The crippling stamp duty associated with this, especially in high-cost areas of the country, doesn’t help.

In addition, with poor inflation having crippled savings growth, the Baby Boomers are cashing in the value of their homes at an astounding rate to enjoy life.

Equity release burst the £3 billion barrier in 2017, which means that much of this property wealth won’t filter down the generations.

And whopping prices aren’t just a south east problem. House prices across the country are rising, as many ‘good news’ pieces of editorial point out. Good news for who though?

According to Hometrack, UK city house price inflation is running at 5%, up from 4% a year ago. Edinburgh is at +7.7% growth, while Birmingham, Manchester, Leicester and Liverpool are all growing by more than 6% per year.

Meanwhile, cities in the South East have fallen somewhat, most notably the over-inflated London and Oxford, while the London prime market has had the toughest decline.

It’s been quite a journey; for example Bristol has seen a 70% increase since 2009 alone. Recently, while looking in an estate agent’s window in Canterbury, a European friend summed this all up by saying, “What’s wrong with housing in your country?”

However, we’re apparently building more than ever, but the conversation should be: what are we building so much of? As a Londoner, I’m all for building at density, and vertically, but it needs to be done well to be worthwhile.

What that doesn’t mean is more luxury. Recently, the Guardian reported that more than half of the 1,900 ultra-luxury (priced at more than £1,500 per sq ft) apartments built in London last year failed to sell. This is not a metaphor. This is a lesson.

With foreign investors deserting the UK housing market, it’s not hard to imagine what will happen to these blocks filled with empty private cinemas and gyms, and not enough residents to pay the running costs. And there are 420 new residential tower blocks being planned.

Khan’s bold move

So I welcome the sweeping changes that Sadiq Khan is bringing to the London Housing market. He’s put the burden on the outer London boroughs, in what has been referred to as ‘waging war’ on them in the media.

His draft London Plan is bold, and forces the question of density – and this is a model that should be applied to cities across the UK.

People may not like it, but if you don’t build up, then you build out.

The Office of National Statistics puts our population at 65.5 million, up from 60.8 million in 2006. By 2026, this is forecast to grow to 69.8 million. That’s an increase of 420,000 per year, which is much higher than the Government’s 300 homes a year target, and we don’t have enough housing now.

So do we build more densely, and higher, or do we consume the Green Belt? Something has to give. Personally, I think we need a mix of both, as bitter a pill it might be to some. Typically those already happily on the market, with a nice view from the kitchen window of their house that’s swollen with equity.

But whatever we do, we should be building more affordable homes, and with more variety, and this is where custom build comes in.

Khan’s action on small sites is a compact but welcome foray in to providing more land for small- and medium-enterprise developments, backed by local government, as the Draft Plan states:

Small sites should play a much greater role in housing delivery and boroughs should pro-actively support well-designed new homes on small sites through both planning decisions and plan-making in order to:
1 Significantly increase the contribution of small sites to meeting London’s housing needs;
2 Diversify the sources, locations, type and mix of housing supply;
3 Support small and medium-sized housebuilders; and
4 Support those wishing to bring forward custom, self-build and community-led housing.

And these smaller players, from builders to community groups, need this support in law to access land. He’s already piloting the Small Sites, Small Builders project, with 10 parcels of Transport-for-London land currently open for bids on London.gov.uk, putting his theory into practice.

Let’s hope that this model could be replicated across the country. If small sites could be brought on from bodies such as the MOD, or rail and water companies, as well provision from land allocated for housing supply, then we might see more custom build happening in practice. And more community-led design, putting the home into houses.

After all, access to land was originally seen as one of the major barriers to custom build growth.

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