London’s Autumn Statement Falls Short on Housing Crisis, Sparks Criticism

Deputy Mayor of London, Tom Copley, has criticized the recent Autumn Statement, labeling it as an “enormous, missed opportunity” to address the escalating housing affordability crisis in the city. Copley emphasizes the ripple effects of the crisis, affecting areas such as healthcare costs due to people living in inadequate conditions and hindering children’s education in overcrowded spaces.

While Chancellor Jeremy Hunt’s statement acknowledged some issues in the housing sector, including an increase in local housing allowance and efforts to streamline planning processes, it lacked significant funding to address the pressing need for new homes in London.

Copley emphasizes the need for a substantial investment of £4.9 billion annually for the next five years to meet the demand for affordable housing. Additionally, he calls for an immediate injection of £470 million for brownfield land funding, aiming to unlock 76,000 new homes in the short term.

The housing shortfall in London is evident in the declining number of housing “starts” projected for the next five years. According to JLL’s research, the number of new homes built falls short of the target each year. In 2021/2022, only 37,200 new homes were built against the set target of 52,000, resulting in a shortfall of 14,800. The forecast indicates a cumulative shortfall of 257,000 homes by 2028, exacerbating the housing crisis.

Nick Whitten, Head of Research at JLL, attributes the worsening situation to a combination of factors, including a lack of available land, rising debt costs, and a shortage of construction workers. This acute housing shortfall is expected to intensify over the next five years, further straining the sales and rental markets and worsening affordability issues across the capital.

Savills, an international property group, supports the notion that 90,000 homes a year are necessary to make a substantial impact on affordability in London. The city’s housing undersupply is likely to persist due to viability constraints, adding pressure to the already strained sales and rental markets.

Housing commentators and analysts, including Anthony Codling of RBC Capital Markets and Paula Higgins of the Homeowners Alliance, joined Copley in expressing disappointment over the Autumn Statement. The statement did not address key issues such as stamp duty, Help to Buy, or income tax, leaving homeowners and first-time buyers without significant support.

The looming challenges faced by mortgage holders, with 15 consecutive interest rate rises, and tenants experiencing substantial rent increases, were largely overlooked in the statement. This lack of comprehensive measures raises concerns about a potential talent drain from the capital as individuals in the middle-income bracket may be pushed out by high housing costs.

Copley advocates for urgent actions, such as rent control or devolution of power to local government, empowering the Greater London Authority (GLA) to implement effective measures. The Autumn Statement, while acknowledging housing issues, has fallen short of delivering the necessary solutions to stabilize rents and house prices for Londoners.

In conclusion, the housing crisis in London persists, and the Autumn Statement has been criticized for not providing the robust measures needed to address the acute challenges faced by residents and potential homebuyers in the city.