In recent years, new housebuilding in London has persistently fallen short of targets set in the London Plan. This has worsened the housing affordability crisis: buying a home and renting privately are increasingly unaffordable for Londoners, with businesses identifying this as a major challenge to staff recruitment and retention. 1
The role of councils in housebuilding has sharply declined since its heyday in the 1960s and 1970s, when London boroughs were the primary agencies for housebuilding in the capital and built many schemes showcasing excellent design – as well as some of more questionable quality. Since then, councils have been discouraged from getting involved in housing supply, partly through cuts in housing subsidies and caps on borrowing.
Recent years, however, have seen a shift.
Against significant political and economic uncertainty, some councils have used innovative approaches to start building more homes again spurred by greater financial independence and new powers granted to them through “localism” – as well as a sense that other developers won’t deliver the mix of market and affordable homes that are needed in their areas.
As the Mayor’s draft New London Plan sets ambitious housing targets, this report will look at councils’ efforts to boost housebuilding in London to date. It will focus on approaches that are primarily led by councils, such as direct delivery and delivery through wholly-owned companies – rather than approaches such as joint ventures with private sector partners, which involve different financial and risk-sharing models.
The aim of this research is to evaluate the current landscape of council-led housing delivery in London and appraise the potential for councils to build more, as well as the financial implications of this. This report will highlight the existing drivers of council-led housing delivery, and the challenges and complexities of scaling up. It draws on interviews with politicians, council officers, researchers and experts in the field, as well as a survey of senior housing officers, and qualitative and quantitative desktop research. From these, the report develops recommendations on how to optimise council housebuilding for the near future.