This report examines the revival of council-led housebuilding in London, assesses the potential for scaling-up existing activities, and outlines the challenges preventing more councils from increasing housing delivery.
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.
Barriers to building more
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.
Recommendations to policymakers
The report recommends that boroughs should work together better to share expertise but policymakers need to do more to support and encourage councils to deliver at scale. Additionally:
- 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.