Drive for profit, not people, has created London’s broken housing market

Prioritising profit over people has created a market that drives new home prices out of reach of ordinary Londoners, an expert panel has argued.

Speakers at the CPRE London Housing crisis workshop in July said that the basis of the city’s housing crisis was affordability, availability and suitability – rather than space.

‘For too long, there’s been a narrative that the housing crisis is all about the green belt,’ said Alice Roberts, CPRE London’s campaigns manager.

‘But with planning permission already granted for 350,000 unbuilt homes, we believe the crisis is really about providing lower cost, affordable accommodation. Building more executive homes across green spaces won’t be the answer.’

The panel, including Sem Moema: London Assembly Member for North East , and Josh Ryan-Collins, Professor in Economics & Finance, UCL  – author of Why can’t you afford a home?, said solutions would only be possible if the real problems were identified.

Josh argued that for too long, housing had been treated as an investment opportunity and a financial asset rather than a necessity.

‘Existing stock could be used more efficiently, and social housing given greater priority,’ he said.

‘Current approaches such as subsidisation of home-purchase inflate demand and raise house prices, rather than increase supply. The private sector has no incentive to build housing at a rate which reduces house prices.’

Sam said it was difficult to see a solution which did not involve building new homes, but a proper planning process was needed.

‘There has to be more focus on what homes are needed and where, and making sure the right infrastructure is in place.

‘Part of the solution is looking at long-term funding for social housing.’

Panellists observed that the planning system could give too much power to developers, and too little to local communities, often meaning the creation of housing that is unaffordable and unsuitable for most people.

Solutions put forward by speakers included prioritising social housing in the planning system, increasing the powers of local authorities to take more radical steps. They also called for an end to right to buy, a limit on foreign purchases driven by speculation, and a clamp down on short-term lets.

CPRE London has now joined with the Just Space Network to create an action plan to tackle the root causes of the crisis. This Action Plan is set out below.

ACTION PLAN FOR THE HOUSING CRISIS

June 2024

To tackle the housing crisis, we call on new MPs and the new Government to commit to:

• Launch a new Housing Rights Bill to enable security of tenure, safe living conditions and rent controls powers for regional and local authorities
• Protect social housing by ending Right to Buy in England and buying back homes previously sold
• Fund a major new social housing building programme
• Establish a new National Empty Homes Programme as called for by Action on Empty Homes
• Fund independent legal support for renters to take their landlord to court if they are living in substandard conditions or if their housing rights are threatened

We are spending more today on subsidising insecure, unaffordable private rents than we have spent on building ‘affordable’ homes in 35 years.

Investing in these actions will pay itself back in a short time frame, reducing benefits and housing bills and ultimately improving economic, social and health outcomes.