“Frankly, getting to 42,000 new homes is going to be difficult,” Blakeway says, without looking remotely downcast, before setting out his ideas to shake things up.
“If we accept that we have had a housing shortage for the past 30 years, then it needs something different to solve it. Before the recession we had a housing market concentrated in the hands of relatively few developers, and there was a limited range of housing, mainly divided into affordable housing, and ‘build to sell’.
It was also a market where most of the finance was in the hands of banks. So, to double the number of homes, we need fundamental reform in three areas — in finance, in the types of housing on offer, and in issues concerning land.”
Every other big city in the world uses finance other than just bank debt, says Blakeway. “In America and Germany there’s a lot of investment from pension funds. We are trying to encourage alternative money into the housing market — called ‘patient capital’ — from sources that can afford to wait longer for returns, such as pension funds or insurers.
We have had interest from Dutch pension fund APG and from Prudential, so it is starting to happen. “We want stability in mortgage rates. A more patient source of capital could help. It’s easy to identify the main problem — too few homes that are too expensive for most people. We want to extend housing in two key areas, broadening the options from the current choice between affordable and built-to-sell.”
One solution: Britain's first "flatpack" Y:Cube affordable homes are due to go up in Mitcham this autumn
Purpose-built for rent
Twenty-four per cent of Londoners rent, says Blakeway. “Most of the phenomenal growth in rentals comes from buy to let. Pension funds might invest in this, in purpose-built blocks with longer tenancies, with a concierge, with rent certainty for both tenant and investor — a bit like student accommodation, good for graduates and for young professionals.”
He adds that “flatpack” Y:Cube homes, which cost £30,000 each to build and were featured in Homes & Property last month, could work here. “It uses modern methods of construction and can be built very quickly. The Mayor is championing it, and other ideas like it, and we are actively encouraging the building industry to look at it.
We are looking at building something of this sort on a GLA-owned site. Wates and Laing O’Rourke are interested. We would run a competition, and see what consumers think, too. It would be the largest project of its kind.
More shared-ownership homes
“Last year we announced a £100 million fund to stimulate renewed interest in shared ownership, to help average households. Look at the typical profile of a shared-ownership buyer. They earn £33,000, put down a £7,000 deposit and have an £80,000 mortgage.
We are going to invest more this year, too, and housing associations will be able to bid for funding. We are also going to cut red tape, so buyers of shared ownership won’t have to apply for special mortgages but for any mortgage on the market.
Speed up building and construction delays
“Currently there are about 200,000 homes with planning consent in London but only about half are under construction. Some builders have genuine reasons for delay, but some have no intention of completing, so we want to distinguish between ‘builders and non-builders’, and put some pressure on.
“To accelerate things, we are also talking about a London Housing Bank to provide cheap loans or equity, to speed up building.”
Earmarking sites for new homes
The Mayor of London is a big landowner, with 667,000 hectares, “on which we can build about 40,000 new homes”, Blakeway points out. “Of that, 85 per cent is being actively marketed to developers right now. It’s important to get it out there. It creates homes and jobs, and sends a signal that once land is identified as surplus, it ought to be put to use. “Eighty hectares of NHS land will also be used, and the Mayor is keen to take some surplus Whitehall land.
A new Metro-land: 10 special housing zones across London
“London built the most homes in the interwar period, in what was called Metro-Land, so we want to rekindle that spirit. We want to make 10 special housing zones across London.
“We are talking to government about giving tax incentives to developers, talking to boroughs about fast-track planning and even about buying land. These zones would be in travel Zones 3 to 5.
“A second idea is garden suburbs within Greater London’s boundaries. These are major regeneration schemes that will provide thousands of new homes — like Barking Riverside, that will have 10,000 new homes and five schools. It is the size of Windsor. And we are pushing for better transport.”
But with 42,000 new homes a year won’t London run out of space soon? “No,” insists Blakeway. “Not for a very long time. Over the next decade there’s room for at least 40,000 new homes a year. On top of that, you could increase density. London’s pretty low-density at the moment.
THE PLAN IN A NUTSHELL:
“We need new finance, new housing products, and new developers coming in, and we need to unlock the potential of suburban London through regeneration and new suburbs.”