The mayor of London needs to double his investment in affordable homes to meet demand and clear the housing backlog, the London Assembly Liberal Democrat group has warned.
The report, launched last week by business secretary Vince Cable and Liberal Democrat London Assembly member Stephen Knight, challenged Boris Johnson’s current affordable housing programme.
According to Affordable Homes & Jobs for London, two-thirds of London councils’ combined target of 567,000 new homes, which are due to be built between 2011 and 2021, could be met through new affordable housing.
The mayor’s current affordable housing programme aims to build 55,000 new affordable homes by 2015. But with only 737 built so far this year, critics have raised concerns that these targets will be missed.
However, a spokeswoman at the mayor’s office told Construction News that despite “considerable delivery challenges, we remain on track to deliver the 55,000 target”.
Construction started on a total of 10,092 affordable homes by the Greater London Authority in the financial year for 2012/13, the mayor’s office announced in April 2013.
One of the proposals by the Liberal Democrat group would see the mayor invest in affordable homes by borrowing under local authority prudential borrowing rules, which it said would see an extra 55,000 affordable homes built in London.
Speaking at the launch, Dr Cable stressed that more needed to be done to ensure London remained on target and ordered officials to “to get on with it and show a bit of imagination” to tackle the extreme shortage of affordable housing in London.
The Home Builders Federation agreed with the report’s fears over a housing crisis in the capital. A HBF spokesman said: “Clearly London has an acute housing shortage and so such measures to increase overall housing provision must be looked at seriously.”
He added: “However, local authorities must ensure their demands are realistic and if the priority is affordable housing then this must be reflected when setting the level of infrastructure contributions.
“Asking for too much will simply make sites unviable and result in no homes being built – affordable or otherwise.”
Other recommendations by the report included the mayor using GLA land for these new projects and scrapping the current Housing Revenue Account borrowing cap to enable London boroughs to invest in affordable housing under prudential borrowing rates.
If the GLA was to do this, the Liberal Democrats predicted that London could have an extra 54,000 affordable homes.
The report was launched shortly before the latest forecasts from the Construction Products Association, which saw an upgrade in growth predictions for the industry over the next five years.
It said output was set to fall by just 0.5 per cent in 2013, compared with the association’s previous forecast of a 1.5 per cent decline made in the summer.
According to the association’s economics director Noble Francis, private housing is one of the main reasons for the boost.
He said: “Help to Buy seems to have given housebuilders confidence that demand will remain sustained and they will take advantage of it while it is there.”
The figures chimed with the latest Royal Institution of Chartered Surveyors construction market survey, which also showed housebuilding on the rise. It highlighted growth in privately funded housing projects compared with the previous quarter.
But RICS chief economist Simon Rubinsohn said caution was still needed.
He said: “While it’s certainly good news that construction – and especially housebuilding – is finally on the rise right across the UK, we are certainly not out of the woods yet.”