Claire Harding: Housing in London means something to the whole country

Reducing the capital’s affordable housing funding will not reduce its need for affordable housing, writes the research director at the Center for London.

The day before the White Paper was published, the government announced it would abolish the 80/20 housing rule. As a result, 80% of public funding for affordable housing was directed to places where the ratio of average house prices to average earnings was highest – an area that covers the whole of London, much of the south-east and much of it. southwestern. Areas with lower house prices got much less money.

Claire Harding, Research Director at the Center for London

At first glance, this makes sense – it’s clear that areas outside London and the south east are still in need of housing, and even in these cheaper areas they will not be provided by the market alone to people with the lowest incomes.

But housing in London is still a big problem and it will only get worse if we build fewer affordable housing. The idea of ​​a pandemic emigration seems to have been mostly media hype, or at most limited to a few wealthy teleworkers: rents are still rising and overcrowding remains a serious, health-damaging problem.

‘Cheap’ housing

This is perhaps most clearly illustrated in London’s temporary housing figures. The proportion of people who become homeless in London is similar to other urban areas in England, but the proportion who become homeless and stuck in temporary housing is much higher: about two-thirds of all English households in temporary housing are in London. There just are not enough places for them to move to.

Global cities are without a doubt a good thing for countries to have … but they are inherently expensive places to live

Because land values ​​in London are so high, new homes at market prices are inevitably expensive – even in the outskirts of London, such as Enfield and Bromley, which have traditionally been seen as more affordable.

Some affordable housing is provided through developers’ obligations, but that will never be enough in itself; “Affordable” housing is only affordable for people with fairly high incomes, and of course they are only built where private, market prices are also built. Unless property value drops dramatically, social housing will remain a crucial part of London’s housing stock, especially for key workers and their families.

Global cities

This problem is far from unique to London’s role in the UK. Many global cities have faced high and rising housing costs in the last few decades, which has made it difficult for them to provide housing for key workers and in some cases create very poor living standards.

Global cities are undoubtedly a good thing for countries to have, and they drive growth and investment: in fact, the government says in its White Paper on equalization that it wants more of them in England. But they are inherently expensive places to live, and the state often has to intervene either through some form of rent control or through publicly funded housing construction to ensure they have the population composition they need to function properly – that we see some places from Hong Kong to Berlin.

Reducing London’s affordable housing finance will not reduce London’s affordable housing needs. But it will push people out of the city when they can no longer cope with the high cost and poor quality of market interest rate rentals, especially as the cost of living is rising so sharply this year.

Many are likely to move to the wider south-east to stay close to social and family ties, increasing pressure on public services and increasing demand for new housing in places like Peterborough, Colchester and Medway, possibly causing a political headache for a government, there are already shattered by debates about building green houses.

Housing in London, as in so many other big cities, is a concern for the whole country.

Claire Harding, Research Director, Center for London

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