The Metropolis

Some extremely disheartening facts about housing in London

Mike Pollitt | Tuesday 15 May, 2012 11:16

Last week the IPPR, a think tank from the centre-left, published a report (PDF) called Affordable capital? Housing in London.

It contains a lot of facts and charts about housing supply, renting, buying and benefits in London. Let me condense the current situation, firstly in my own words:

“It’s a fucking mess”

And now, more constructively, in the report’s words (my gloss in italics):

“London’s population of 7.9 million people, living in approximately 3.3 million households, is expected to increase by 1.02 million people (12 per cent) over the next 20 years.” Demand for somewhere to live is only going to rise

“While London’s population grew by 8 per cent between 1997 and 2011, the number of actual households cr eated increased by just 4 per cent.” Twentysomethings are house sharing for a long time

“There are currently no London boroughs in which the average rents are below £700 per month.” Even the cheapest boroughs aren’t that cheap

“The majority (22) of London boroughs have median rents that cost more than 50 per cent of median local full-time earnings.” Housing chairty Shelter calls that “unaffordable”

“In nine London boroughs, the average private sector rent is 65 per cent or more of the median take-home pay.” Ouch

Then the report considers housing benefit reform. I’ve written before that some reform to the status quo is necessary. The Guardian’s Dave Hill and Josh Hall on this site objected that reform will cause suffering to vulnerable people. The report makes grim reading for both sides.

“In the [private sector] in London, Local Housing Allowance is costing £1.6 billion a year, or 28 per cent of the nation’s entire bill for this allowance”. That’s money going from the taxpayer to private landlords. Supportable?

“The reforms are predicated on the assumption that, when faced with shortfalls in their rent, individuals and households will be able to renegotiate their rents with their landlords or move home. In the case of London, both of these assumptions may be flawed.” There aren’t enough cheaper homes to move in to

“While there have been a number of rather alarmist figures regarding likely mass evictions and an unprecedented migration of inner London households to outer London, it is more likely that a significant proportion of those households affected will have no choice but to stay in their current homes and reduce other outgoings”. People claiming housing benefit will be poorer when the changes hit

Either we continue filling landlords’ pockets with public money, or we force people on low incomes to live on even lower ones. Not good, is it?

So, more homes need to be built. But this isn’t easy, either. I’ve thought that we should be building upwards, and that local people objecting to new towers are helping keep rents high by stifling demand. But it’s not so simple:

“Much new housing development in London consists of one- or two-bedroom flats suitable for young, childless and mobile households: these properties offer advantages to developers and to public servants with targets to deliver specified numbers of units, but they do little to address the problems of overcrowding and council waiting lists associated with unmet demand from families.” Building towers of flats can’t solve underlying problems, though it might help provide some additional supply

If you’re still reading at this point, I commend you to read this blog post by the IPPR’s Phil McCarvill outlining some things he thinks the Mayor could do to help the situation. These include a separate housing benefit cap for London, and for the Mayor to take over repsonsibility for housing benefit in the capital. Devolved power is surely the way to go, but it’s clearly going to take a very long time to get out of a very big hole.

See also:

PDF of the report
@IPPR on Twitter
Phil McCarville at Homes for London summing up the report
Dave Hill’s housing posts at the Guardian

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