This report examines council-led housebuilding in London, assessing the potential for scaling up, and the challenges preventing councils from increasing their
housing delivery to its full potential.
London is facing a housing shortfall, and a low supply of new affordable housing. Since its heyday in the 1960s and 1970s, council-led housebuilding has sharply declined. However, London’s boroughs are starting to build again, and the time is ripe for councils to build more.
Our research found:
- 14 boroughs have direct delivery programmes – i.e. development of public land using in-house teams – with 10,900 homes in the pipeline over the next five years.
- 17 boroughs have active wholly-owned development companies – i.e. separate commercial companies owned by councils – with 12,700 homes in the pipeline for the next five years.
- This represents close to eight per cent of the new London Plan targets for London boroughs over this period.
… but the real potential is yet to be realised…
- If every one of London’s 32 boroughs was able to deliver a minimum of 10 per cent of their London Plan target, through direct delivery or a wholly owned company, a total of 37,300 homes could be delivered over the next five years.
…However, there are a number of challenges that prevent councils from increasing their housing delivery to its full potential…
- Access to finance to build more housing, owing to restrictions on borrowing capacity and on the use of Right to Buy receipts.
- Intra-council barriers, lack of political support, and legislative and regulatory issues in setting up wholly-owned companies.
- Councils face a range of planning and development issues that are exacerbated by a lack of internal capacity and expertise.
… Boroughs could work together better to share expertise but policymakers need to do more to support and encourage councils to deliver at scale..
- The government should relax the conditions attached to various funding streams and recognise the key role that councils can play in delivering more housing.
- The GLA should develop the existing Public Practice scheme to give more boroughs access to the development staff they will need as they start building homes again.
- The Mayor should use his funding powers to support the development of sub-regional consortiums or delivery bodies.
Correction: The report states that Sutton council aims to deliver 93 units through its wholly-owned housing company, Sutton Living. However, these 93 units are to be directly delivered by the council.