OPINION - London rents hit record high – and worse may be to come
Given the 80,000 or so people who subscribe to West End Final, the law of averages suggests that, at minimum, half a dozen former housing ministers are reading this email.
Even prior to the Liz Truss experiment, Whitehall turnover was legendary. But few stats are as mind-blowing as the fact that the UK (or really England due to devolution) has churned through 15 housing ministers since 2010 and 24 since 1997.
This is not the main reason why the average monthly rent in London has hit a new record high of £2,210, up 17.2 per cent on the year. Or why house affordability is at its lowest since 1876. But it does mean that no one has stuck around long enough either to see through policies or be held accountable.
The principal issue is of course that the population is rising faster than we are building new homes. Between 2011 and 2021, the population of England increased from 53.1m to 56.5m – a rise of 3.7m. But the number of dwellings increased by only 1.7m.
The 2019 Conservative Party manifesto included a pledge to “continue to increase the number of homes being built” by progressing to a target of 300,000 homes a year by the mid-2020s which would “see us build at least a million more homes, of all tenures, over the next Parliament.”
Even that is unlikely to prove sufficient. One estimate commissioned by the National Housing Federation (NHF) found that roughly 340,000 new homes need to be supplied in England annually, of which 145,000 should be affordable. But the government’s own figures show new housing supply is well below even the 300,000 target. In 2021-22, the latest year for which figures are available, 232,820 new homes were supplied.
The central barrier to building more homes is the planning system. Rarely a day goes by without an MP from any party taking to Twitter to crow about how they have blocked a ghastly new development sure to blight their local area. This interview with Theresa Villiers in The Times provides a valuable insight into the mindset.
It is useful to note that this is not a purely post-Right to Buy problem. According to the Centre for Cities think tank, housebuilding rates in England and Wales have fallen by more than a third since the introduction of the Town and Country Planning Act 1947.
Of course, the consequences of a lack of housing are pervasive. Without access to suitable and affordable homes, people are forced into overcrowding. More than a million Londoners – over half of whom are children – currently live in overcrowded homes, according to the NHF.
As recently covered in the paper and in this newsletter, more young Londoners are either moving back in with their parents or leaving the city entirely. And then there is the issue of homelessness – one in 58 Londoners were estimated to be homeless in 2022.
More housing of all types (to buy, rent both private and social, for the elderly etc) is vital not simply so people can have somewhere to live, but to alleviate our economic malaise. A lack of enough homes where people actually want to live is a significant constraint on the supply of labour, acting as a downward force on productivity.
The land does exist. Britain still has plenty. But unlocking it requires deep reserves of political will and bravery. A quality in almost as short supply as a two-bed in Zone 3.
In the comment pages, Philip Collins suggests thesecret of a Labour win is for Keir Starmer to sound like a conservative. Rob Rinder reveals his father’s dementia is heartbreaking, but it has made his family closer. While Nick Clark says the Roundhouse is giving young people hope.
And finally, Joe Bromley reflects on Eurovision – the Christmas, Coronation and World Cup final rolled into one for “girls, gays and theys”.
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