Housing London's growing population
I recently spoke about the challenge of housing London’s growing population at a conference hosted by Transport for London and Mayor Boris Johnson.
The theme of the conference was Shaping a Growing London: The place of an Airport, and my speech gave me the opportunity to give a personal view on our future airport strategy. As a Londoner it has always struck me as odd that so many planes have to fly over our city.
The scale of the challenge
Over the last 10 years London’s population has grown by approximately 1 million, yet only 202,400 new homes were built in the same period. The population is forecast to grow by a further million in the next 10 years, yet housing figures show that only around 18,380 new homes were built in 2012/13. This situation is unsustainable.
The principal of supply and demand brings a further challenge: rapid house price inflation.
On the demand side, house prices are rising. In April the London regional average house price was around £473,900 and the average rent for a 2 bedroom flat was £365 per week.
On the supply side, London is already behind in terms of house building. If this trend continues it will serve only to weaken London’s competitiveness. A London First survey put out to its members in 2013 showed that 68% of respondents were worried about the impact that a shortage of housing and high prices were having on their ability to recruit and retain staff. For business to continue to flourish in London we must build more homes at more affordable prices to support a growing population and workforce.
What is Peabody doing?
We are building more homes. Our development pipeline now includes more than 5,000 homes, more than ever in our 150 year history. We aim to deliver 1,000 homes per year – and we have the capacity to do much more.
We have recently taken on a major regeneration project in Thamesmead, which has the potential to deliver 10,000 more homes and jobs. Our long-term aim is to recreate Thamesmead as a high-quality garden city in London; starting now, with improvements for current residents, investment in existing housing stock and new homes.
The East Thames region
One of the major reasons for Thamesmead becoming one of London’s key regeneration areas is the arrival of Crossrail in 2018, which will open up opportunities to travel to and from Thamesmead to central London in just 11 minutes.
Insufficient infrastructure and access to employment has seen some of London’s major regeneration sites not fulfil their potential. A new airport to the east of London would act as a catalyst for local infrastructure, opening up regeneration opportunities throughout the East Thames area. Increased transport links would encourage development agencies and housing associations to invest in projects (like our project in Thamesmead) that would provide homes and jobs in the East and cater for London’s growing population.
It would be an incredibly hard decision to close Heathrow in the next 20 years but my personal view is that it would have a major beneficial impact on London and our economy.
New homes at Mint Street in Bethnal Green
Meeting London's housing challenge
Peabody and others are doing what we can to open up regeneration sites and provide desperately needed new homes in London. East London certainly holds the potential to deliver many more homes and jobs, however, to effectively meet the demands of a growing population we need to think strategically about:
- Long-term planning – infrastructure investment and land release should be planned on a 10-20 year basis removing it from the short-term political cycle.
- Transport infrastructure - improving transport links is crucial to opening up new sites for development. The airport would act as a catalyst to increase these links.
- Reviewing the strategic use of brownfield land in East London - any land that is redesignated to housing should be released using a broad definition of ‘best value,’ which considers the wider social and economic value.
- High-quality and dense development
We need to seriously face the challenge of housing London’s growing population – if we don’t we face serious economic and social consequences as London becomes an unattractive offer for investors, entrepreneurs and business people from abroad.
We’re building new homes right across London. Take a look at the exciting new developments we’re building now – and find out how we’re helping to meet demand for new homes by increasing the Peabody housing stock.
Interested in buying a shared ownership or private sale home with Peabody? Visit our sales website.
Peabody is always interested in new land, acquisition and development opportunities in London. Find out who to contact.