Sadiq Khan is to announce the surpassing of a landmark housebuilding target in London, but will warn that the capital’s skyrocketing rents pose a threat to “the soul of our city”.
In a speech on Monday setting out his stall before the 2024 election for city hall, the mayor of London will say that nearly 120,000 affordable homes have been built in the capital since 2015, equivalent to the housing stock of Plymouth.
The Tory chair of the London assembly, Andrew Boff, had questioned as recently as 3 May whether Khan, a former Labour MP, could meet a 116,000-home target set seven years ago as part of an agreement with central government that secured £4.82bn in funding.
That threshold has now been passed, but Khan will concede in a speech at a development at the Royal Eden Docks in Newham that London is still at risk of being a “playground for the rich”, with rents rising at their fastest rate in a decade.
The real estate advisory firm JLL reported earlier this year that rental listings had dropped by 35% in London in 2022 compared with 2019, pushing rents up 21% over the three-year period.
According to the Office for National Statistics, private rental prices in the capital increased by 4.6% in the 12 months to February 2023, up from an increase of 4.3% in the 12 months to January. It was the strongest annual percentage change since January 2013.
The chief executive of Foxtons, Guy Gittins, has said it is inevitable that more people will need to move out of London because of the lack of affordable housing stock.
Khan will say that these trends are changing the demographic makeup of the city, and dramatically driving down the living standards of many of those who choose to stay.
“The housing crisis is turbo-charging inequalities in wealth, health and happiness,” he will say. “It’s making our city less meritocratic and more divided. As mayor, I don’t want to see London become a playground for the rich. I’m determined to build a London for everyone.
“I’m proud to say London is building again. In recent years, we’ve completed more homes of all types than at any time since the 1930s.”
Khan has long sought new powers to freeze rents, but ministers have been rebuffed him.
He will, however, be able to announce that work started on a record 25,658 affordable homes last year, up from 18,840 in 2021/22.
City hall claimed this was three times the level managed at the end of Boris Johnson’s term in office.
Greenwich and Ealing were the best performing boroughs in 2022-23. Each recorded more than 2,000 affordable homes started either by the council or housing associations.
Research by city hall and Savills published in December 2022 found that London needs £4.9bn a year between 2023-24 and 2027-28 to deliver the 130,000 affordable homes it requires to keep up with population growth.
Khan will say that central government has yet to pledge such funding, but will point to his efforts to increase the amount of affordable housing provided on major developments referred to him for planning approval.
The average percentage of affordable homes on developments approved by Khan doubled from 22% in 2016 to 41% last year, according to city hall.
“We’re choosing to build the genuinely affordable homes Londoners need, not prioritising luxury penthouses for overseas investors,” he is expected to say.
“We’re choosing to take the side of renters by demanding the government introduce a rent freeze. We’re choosing to reject the notion that housing is an asset, rather than a basic necessity.”
