Jo Valentine is a House of Lords cross-bencher. Since 2003 she has been chief executive of London First, a non-profit organisation that promotes the capital as the best place in the world for business. A former banker, she also sits on the board of the Peabody housing trust.
* Housing associations currently building one out of every four new homes. Longer funding cycles needed to boost confidence of house builders
* Government should release unused land to be put back into use for housing
* Find ways to speed up the planning process
* Need long-term approach from Government making housing a national priority, with adequate funding
H&P: In a speech in 2010 you said that London accounts for a quarter of all UK business, and called it the "golden spot" of the UK. You estimated that by 2020 the capital would have a million more inhabitants, many from the UK and Europe.
Given that London already has a housing crisis, and young Londoners say they feel priced out of the market, what are we going to do to house everyone?
Jo Valentine: What's interesting about that statistic of one million is that in the Thirties, London's population was greater than now. It shrank to its lowest in the Eighties. Now, at 8.2 million, it is getting near its highest level of 8.6 million.
So, back then, there were more people, but the quality of housing was less good. Lots of people shared a bath! Today we want better as well as sustainable living conditions, with shops and houses in the same place, creating little neighbourhoods.
'Housing associations' motivation is to build houses for people that need them (rather than just for maximum profit), and they are managing to do this in these uncertain and risky times'
Housing, at the moment, suffers from "initiativitis". There are far too many well-intentioned people trying to do well-intentioned stuff, so there are lots of good ideas, such as many incentives for first-time buyers. But the market is never given time to settle down and follow one idea right through. Chopping and changing strategy is a problem.
Housing associations play an interesting role. Currently they are building about one out of four new homes. Peabody has enough cash to build but many other housing associations don't know what grants they will get after the 2015 government spending review, and that lack of certainty about long-term funding is hugely unhelpful for house builders. Housing has become a victim of short-cycle funding. London needs longer funding cycles and longer plans so we can build the homes!
H&P: What are some of the good ideas out there?
Jo Valentine: One is the release of public sector land. Government sitting on unused land is unhelpful. Down the road from me is Putney Hospital, which has lain crumbling for years.
Government should invest in London's infrastructure — which includes housing — which in turn creates jobs. Land like this could be handed over to the Mayor. He's in charge of the London Plan, so he could pass it on cheaply to the marketplace with strict conditions about putting it back into use for housing; and he could help get the funds released. Pulling all these strands together is fiddly — but there's a huge amount of land like this lying idle. I'm suggesting a sort of "compulsory disposal", and in return there would have to be incentives given by national government to make public sector owners release land.
We have the New Homes Bonus, in which national government gives a local authority money for delivering new homes, but we don't hear much about it, so the sums may need recalibrating. Also, the new homes need to be integrated into the community so some money should be spent by the local authorities on amenities that local people really want, and that could be the integrating force for a development.
H&P: What holds things up?
Jo Valentine: Planning always takes too long. The Greater London Authority should be able to call in any housing project that doesn't start after a certain amount of time, and then Mayor Boris Johnson could take it over. Often it's protest, local people who don't want a new development in their backyard, that lies behind delays and local authorities reflect that wish. So its difficult.
H&P: What about the banks? Can't they do more? All new homes need funding.
Jo Valentine: We're in a dire economic position, with high debt and the credit crisis. Our old mindset that we could have anything we wanted whenever we wanted it, such as buying a house, has gone. London is becoming more like Europe, with more young people renting. The Olympics East Village, for example, by developer Lendlease, will have lots of homes to rent coming on line. First-time buyers will need to use new financing methods like the Government's FirstBuy scheme.
As for the banks, it's not their job to be "nice": it is a bank's job to lend at commercial rates, and to rebuild its balance sheets. They can't give handouts.
However, one scheme designed to help is the Government's Funding for Lending scheme, under which banks are loaned money on easy terms as long as the loan is for mortgages. As an aside — it is interesting that the housing associations' motivation is to build houses for people that need them (rather than just for maximum profit), and they are managing to do this in these uncertain and risky times, and as far as I can see they are doing it rather well, upping their game and being imaginative over funding, like building private houses to subsidise their public housing.
H&P: So what is your solution, in a nutshell?
Jo Valentine: What we really need is a long-term approach from the Government making housing a national priority, with adequate funding. In the end, long-term planning is better and more effective than lots of separate good ideas.