Evening Standard comment: A new strategy for housing in the capital

London’s basic problem is simply that there are not enough homes, powering a dizzying surge in prices
28 March 2014
WEST END FINAL

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Boris Johnson’s brisk dismissal of Prince Charles’s intervention in the housing debate is based on a coherent strategy. The Prince argued this week for more mid-rise apartment blocks — a criticism, in part, of the high-rise towers that have sprouted across our skyline in recent years. The Mayor counters that it would be “absolutely crazy” to rule out building more of these. But in fact the tall buildings debate is a distraction here: most are for commercial use. London’s basic problem is simply that there are not enough homes, powering a dizzying surge in prices, up more than 13 per cent in the last year to an average of £458,000.

The Mayor’s strategy targets that problem by attempting to address supply. He calls for a doubling of house building, to 42,000 homes a year, and for more aggressive use of surplus public land — a potentially important source of new building space within the capital. His strategy also targets other issues including costs for first-time buyers and unfair service charges for leaseholders.

This is all positive, though whether it will alone be enough to tame London’s rocketing house prices is unlikely. There is pent-up domestic demand after years with little housebuilding, as well as seemingly limitless demand from foreign investors. While the latter are in part a sign of London’s success, without measures to slow the rush of non-resident foreign buyers, the pressure on Londoners trying to buy homes will only increase. Indeed the Mayor’s 42,000-home target is seen by many commentators as too low: various reports have put the figure at more than 50,000 a year. We may well also have to consider breaching the green belt.

But this is a worthwhile strategy. To date the Mayor’s progress towards a separate target of 100,000 affordable homes over his two terms has been shaky. Now he must deliver on housing in his two remaining years of office.

Low-pay London

Despite London’s economic boom, the recovery is not being enjoyed by all Londoners: low pay remains a significant problem. What is more surprising is the fact that pay rises are higher, on average, outside the capital. New figures show that over the past three years, pay here has risen by only half as much as in some regions. Median hourly earnings in London rose just 30p, compared to 62p in the North-East, for example. Average wages are higher in London: the lowest-paid quarter of workers made on average £9.56 an hour, compared with £7.70 in the North East. But those workers also had the lowest pay rises: their wages went up just 12p an hour in three years.

Pay restraint in recent years may have helped the recovery — though it also holds down demand. But it has contributed to a worsening of living standards, coming at a time of inflation and steeply rising rents. For the very lowest paid, this paper has made the case for the London Living Wage, £8.80 an hour; last November it rose by 25p. But there are plenty of workers on more than that who struggle to make ends meet. The capital’s economy is booming again: low-paid Londoners deserve their share.

This tolerant nation

The legalisation of same-sex marriage tomorrow is a landmark not just for gay and lesbian people but for the whole of British society. A change that would have been almost unthinkable 20 years ago has become mainstream. Gay people still face prejudice and discrimination: we must fight that. But the advent of gay marriage, fully equal with that enjoyed by heterosexuals, is nevertheless an important step — and a measure of our increasing tolerance as a nation.

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