Mixed sector reaction to ‘emergency’ package to boost London’s housebuilding market

Sadiq Khan and housing secretary Steve Reed’s package to kickstart London’s ailing housebuilding market has drawn a mixed reaction across the wider housing sector.

The government and the Mayor of London today jointly announced a long-awaited package of policy changes in a bid to kickstart housing development in the capital, which has seen starts plummet 87% in the first half of the year.

The package includes a two-year cut in affordable housing requirements on private sites from 35% to 20%, changes to design requirements in a bid to boost densification, a reduction in the Community Infrastructure Levy and changes to the mayor’s call-in powers.

The announcement has been welcomed by many in the housebuilding and construction sector.

Rico Wojtulewicz, head of policy and market insight at the National Federation of Builders, said: “The government were handed a poison chalice when it came to the supply of new build homes. Build costs spiralled due to poorly assessed planning policies and regulations.

“Today’s announcements are welcomed, and it shows the Government is serious about new housing. There remains so much to unpick about housing viability and affordability.”

Paul Rickard, chief executive of Pocket Living, described the range of measures announced, including the reduced affordable housing threshold, as “sensible and welcome” and said it should unlock thousands of new schemes across London and restore confidence in the market.

Craig Carson, regional director at Barratt London, also responded positively to the announcement. He said: ”These welcome proposals will help us start to tackle the housing crisis we face in London, delivering more homes of all tenures and the investment in infrastructure, jobs and economic growth that development will bring to our capital. Alongside this emergency package, it is vital that government looks at ways we can support homebuyers in London. 

Danny Pinder, director of policy (real estate) at the British Property Federation said it is good to see that the mayor and the government recognise the issue of viability and said it is “a positive step”. However Pinder said the issue won’t solve the delays at the Building Safety Regulator which have been holding up schemes.

Ian McDermott, chief executive of Peabody and chair of the G15, said: “Action to reduce costs and simplify some planning requirements will help.

He said: “Emergency times call for emergency measures, and the need for some temporary interventions to unlock stalled sites and get developers building quickly is clear. Action to reduce costs and simplify some planning requirements will help.

“Time will tell if there is sufficient market demand for developers to scale up delivery on the back of today’s announcements, but the goal is to try and secure more much-needed social and affordable homes through the S106 system of developer contributions.”

>>See also: Government and City Hall confirm two-year cut in affordable housing requirements from 35% to 20%

>>See also: Will the expected London housebuilding package rescue the stalled development industry?

Gavin Smart, chief executive at the Chartered Institute of Housing, warned the lowering of affordable housing requirements “must be a temporary measure and cannot set a precedent for affordable home targets more widely.”

He said: “We urge the government to set clear timelines and guidelines for reverting back to the agreed 35 per cent affordable homes target in London, particularly as there is an overwhelming need for social and affordable housing in the city.”

One housebuilding leader, who declined to be named, criticised the plan to allow registered providers to use affordable housing grant to purchase half of the required affordable housing units on schemes. He said the measure risked making the section 106 system reliant on grant and would lead to a lowering of affordable housing delivery overall.