Quote of the Day:

“The most terrifying words in the English language are: I’m from the government and I’m here to help”
                  Ronald Reagan

So, a little later than usual but, with the excitement of our announcement yesterday I thought you may want at least 24 hours between missives. I also suspect that only a small handful of you have already read the Draft Housing Strategy by now so I’m still in time.

Well, isn’t this exciting, the Mayor of London has published something resembling a policy. Clearly, the document is prefaced by the obligatory full page shot of the man himself in casual conversation with someone we assume to be a voter rather than a member of his staff.

The document opens with Sadiq Khan once again declaring housing to be the biggest barrier to growth facing London – which rather begs the question as to why so little seems to have been delivered in his 18 months in power and why the GLA are so reluctant to call in applications in many of the high housing target boroughs at the moment. In reality, we all know why they won’t call applications in – many of the high target boroughs are Labour and are already on an election footing despite the elections not being until May next year. As far as many are concerned, red lines have already been drawn against controversial applications – which basically includes any housing of any significance – so we can expect continued lethargy between now and May. Anyway, rant aside and back to the main document…

The document sets out the parameters of the role which the Mayor sees for developers, local authorities, housing associations and City Hall. It seeks to address the existing immediate crisis as well as the long-term implications.

The key priorities are set out as:

  • Building homes for Londoners – that phrase always confuses me, by definition if you live in London you are a Londoner, whether you have just moved to the area or not. It always sounds like a passive aggressive way of trying to keep northerners out of the Capital.
  • Delivering genuinely affordable homes – helpfully this is good and ambiguous with no actual definition of what is affordable – although committing to work towards a definition based on household income caps –  meaning this can be fought out through viability but also that it opens the door to a range of approaches including pre-fab, PRS, pocket properties etc.
  • High quality homes and inclusive neighbourhoods – I assume the second part of this means no ‘poor doors’ or social segregation either within new developments or between new and existing communities.
  • A fairer deal for private renters and leaseholders – providing better properties and terms for private renters is a huge issue within London, in which PRS has a big role to play alongside other legislation; if Central Government ever get round to producing a Housing Bill on the back of the White Paper we may get some further clarification on this more broadly.
  • Tacking homelessness and helping rough sleepers – very noble intentions but, in order to tackle homelessness effectively, you have to solve the entire housing crisis itself so it rather brings us back to the original point of the pace of development.

Local Authorities and Investment

Khan has signalled a return back to the London Plan under Ken Livingstone days when each borough had specific housing targets. He is also looking to step in to speed up the development on Council owned land – the fact that the GLA is currently not delivering much on the public land it is in control of does not appear to strike the Mayoral team as rather ironic. Admittedly, this is an arduous process and 18 months is possibly not enough time to really get this going, but the next iteration of the London Plan really needs to point towards progress for Sadiq Khan to deliver on his intentions.

The Mayor will also look to invest in public transport where that can be used to unlock housing development and bring greater growth to the City as well as looking to invest to de-risk housing delivery.

Building Homes and Affordable Housing

Sadiq Khan has once again reiterated his intention to intensify land use – to most people that means higher density development. At the same time he has signalled his intention to intervene in the market (a sentence which may strike fear into the heart of many a developer) to push forward sites and bring forward infrastructure. Exactly how he proposes to do this is unclear (he has however set out reasons as to why land may not come forward which mainly suggests that developers are to blame in every scenario). Expect more detail in the London Plan. At the same time, he has set out a framework to annoy many a local councillor and community members by shifting part of his focus from large sites to town centres, high streets and smaller infill sites.

Greenbelt once more declared as sacrosanct – not great news for some of those with schemes in outer London boroughs which are dependent on greenbelt release. There is however, a subtle but important shift in the types of development which will be supported with building homes above schools specifically identified as a priority alongside consolidating industrial space.

In terms of affordable, the Mayor has signalled his intention to invest in social rent and London Living Rent homes. A series of tests will also be established to ensure that homes are genuinely affordable…

His original 50% affordable target rears its head again with a commitment to working towards this whilst currently fast tracking developments which meet existing housing targets. The challenge he has here is that a significant proportion of the major developments which he needs to get over the line to meet his housing figures, simply aren’t meeting his 35% threshold for fast-tracking. If this continues, his delivery legacy will be woeful when it comes to re-election.

The Mayor is also pushing for every home lost under Right to Buy to be replaced on a like for like basis. This will also apply to homes which are demolished – so will apply to every estate regeneration programme in London.

Diversifying the Housebuilding Industry

In this, Sadiq Khan pledges to make it easier for smaller housebuilders to access funds – blah, blah, blah. As many of you who are smaller housebuilders will know, the majority of government-led programmes to enable smaller housebuilders to access funds continue to have requirements and policies which effectively block smaller housebuilders from accessing the funds and are simply not set up to deal with the financial structures of smaller housebuilders. However, Sadiq Khan does appear to have recognised many of these obstacles and is putting in place a ‘Small Sites, Small Builders’ programme, piloted on public land to bring smaller builders into the mix, this will include a presumption in favour of planning on small sites.

Interestingly, the document goes on to say that housing associations will be encouraged to develop through ‘strategic partnership’ – presumably this can only be with the private sector – and the Councils can look to borrow to develop. Again, this is reflective of the Housing White Paper and is a proposal which is widely supported across the industry. However, until some detail has been revealed as to how exactly this will be structured, it is difficult to get too excited about it. Not least as funding to build is not the only issue local authorities have, there are simply not the skills within local authorities to bring forward development and this will need addressing at the same time.

As well as diversifying the industry, the Mayor wants to get communities involved in it so it is funding a Community Led Housing Hub to look at issues of estate regeneration, social infrastructure, design, place-making etc and to make the process more open and transparent. This includes encouraging local authorities to make viability assessments public and making public exactly how commuted sums in lieu of affordable housing are spent. Another one to bring joy to all in the industry on this bright and sunny day…

Improving Skills

Well yes, good luck with that. Given that our Government under Mrs Maybe seems determined to hurtle headlong towards a post-Brexit immigration policy that is likely to cripple the construction industry, improving skills of UK workers is essential. I think we may have an issue with timing here and there is genuine concern over how the skills gap will be bridged in the short term. But, never fear, Sadiq Khan is going to provide ‘leadership and co-ordination’ to address this issue. Phew, we can all settle down now, it’s going to be fine.

Private Renting

Landlord licensing, longer term tenancies, better protections and more support for PRS – that is basically it in a nutshell. Any objections? No, great, lets get that one done and move on then.

Conclusion

It is quite a weighty document and is open for consultation – the link can be found here https://www.london.gov.uk/sites/default/files/london_draft_housing_strategy.pdf. Ultimately, the Mayor needs this to be successful if he is to deliver on his housing commitments. Whilst some of it is simply a reiteration of existing policies and other points require national legislation, there are aspects in there which are radical enough to make for much review and response from across the industry and particularly from local authorities.

We expect this to eventually fall into the revised London Plan which is due out this Autumn. Watch this space!