Sadiq Khan warns lack of affordable homes causing ‘profound and devastating’ effect on Londoners

Sadiq Khan has claimed that housebuilding in the English capital is “on its knees”, with the lack of affordable homes having a “profound and devastating” effect on Londoners.

Speaking at the Centre for London’s annual conference on Monday (11 November), the Mayor of London decried the legacy of the previous government, saying we are currently in the toughest environment for house-building in London “since the global financial crash of 2008”. 

Khan referenced a new report commissioned by City Hall, London Councils, Trust for London and the G15, which found that a 1% increase in housing affordability could provide a boost of £7.3 billion to London’s economy over a decade. 

“The mess left by the last government has had a catastrophic effect on house-building,” Khan said at the conference. “Funding for new social housing was slashed. Local authority housing and planning budgets were cut to the bone… All of this – combined with the economic legacy of low-growth, high interest rates, the rise in the cost of construction materials, a shortage of workers, and the lasting impact of a hard Brexit – has left house-building on its knees.”

He continued: “A lack of affordable homes is having a profound and devastating effect in every corner of our capital, impacting every part of our progress. 

“It’s creating intergenerational inequality like we’ve never seen before. It’s shattering one of the bedrock principles Britain was built on: that if you work hard, you get ahead. And it’s having far-reaching implications for the demographics of our country and our capital.”

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Sadiq Khan has previously promised progress on house-building in London, committing to building 40,000 new council homes by 2030 in the run-up to his re-election as Mayor for London. He also pledged to end rough sleeping in the capital by 2030, describing London homelessness figures as a “horror”.

Last month the London mayor told the Big Issue he was “sorry” when asked what he would say to children living in temporary accommodation this Christmas.

In October, reports found that homelessness in the capital is at the highest level on record, estimating that more than 183,000 Londoners are homeless and living in temporary accommodation, including 90,000 children. 

“In London, high house prices and rents relative to income are holding our economy back,” Khan said. “The new research we are publishing shows that affordable housing in London is absolutely critical if we are to realise our national growth ambitions.”

He continued: “Our analysis shows that even a small change for the individual can produce something far greater for the collective. In fact, just a 1% decrease in house prices could boost London’s economic output by £7.3 billion over a decade. In short, investment in building homes people can afford, will lead to the growth we need. 

“If there was ever a time for more public investment in housing, it’s now. And if there was ever a place to show how government still has the capacity to improve the condition of people’s lives, then it’s housing.”

Commenting on Monday’s report, councillor Claire Holland, chair of London Councils, said: “The chronic shortage of affordable housing in the capital is driving up homelessness and putting the brakes on London’s economic growth.

“Astronomical housing costs absorb a huge proportion of Londoners’ income, make it harder for businesses to recruit, and are a clear drag on productivity.”

Holland added: “As this important new research reveals, improving housing affordability in London would bring significant economic benefits, as well as helping those Londoners most impacted by the housing crisis. This is the latest evidence of why increased investment in affordable housing is so crucial.”

Susie Dye, who leads Trust for London’s Tackling the Housing Crisis programme, added: “The housing crisis is damaging Londoners’ health and living standards. Now we can see that it’s holding back our economy, too.”

Dye continued: “For growth and productivity, we need a vibrant city where people can afford to live. Londoners – and especially the low-income Londoners who keep our city going – hope the Treasury and the government will take note, and commit the significant levels of public investment needed to make London more affordable to live in, and not just a playground for the rich.”

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