Thoughts & Insights

Innovation’s importance in addressing housing supply

Housing in London remains at the forefront of discussions surrounding the capital. As part of our housing inquiry we continue to bring together key individuals who can drive the conversations forward and implement the solutions

In partnership with London First, we hosted a roundtable discussion with representatives from the public, private and third sectors to understand their perceptions of the biggest obstacles to addressing the housing supply in London, and how we can more successfully address them improved cross sector collaboration.

Agreeing and understanding definitions and targets is critical, as they guide many development and planning decisions about what is built.

Understanding what ‘affordable’ means is also key. It was agreed that the definition of ‘affordable’ needs to be stretched in two directions:

  •  – understanding what types of homes are needed in London, by whom and where
  •  – ensuring definitions and targets are calibrated to incentivise their supply and encourage innovative approaches

 

There was unanimous agreement that the gap in suitable places to live for households who don’t qualify for social rent, but who earn below £70,000 a year – the level at which it becomes feasible to buy in London at current prices – was far too big. With average wages in London being closer to £30,000 this provides employers with a challenge when it comes to ensuring they and the capital can recruit and retain the best talent.

There was a cry from the property sector for a concerted national effort to invest in the skills required by the construction industry – which, in light of Brexit, is more important than ever.

The theme of trust continued to be raised in the discussion of how we can increase supply, with both public and private sectors distrusting the other. Local authorities are suspicious of the motives of private sector, while private sector business don’t always believe in the competency of local government to deliver on joint ventures. As collaborative working is critical to addressing housing, this perception must change – more trust must be built and barriers between sectors must be broken down.

Our roundtable discussion provided a forum to raise why each held this perception and what could be done to begin building the trust. Flexibility at local authority level, particularly around planning, was welcomed, with increased devolution – coupled with deregulation – allowing facilitation of tailored approaches was proposed as one of the ways forward. Local authorities setting up their own development companies was also discussed, which removes the issue of land availability as land is generally under local authority ownership, but also brought with it a concern that local authorities lack the expertise around property development. Housing Associations, with their long track record of successful property management, were seen as having a pivotal role to play.

What is clear, is that innovation is vital to addressing housing supply. At its current rate not enough houses are being built, and this will remain the case until we start looking at different approaches. Innovation is needed in approach, planning, supply models, financing and construction to reach the targets that have been set. Although there is no one-size-fits-all model, there are success stories that we can learn from and adapt. Our inquiry will continue to facilitate discussions, bringing together those who can adapt these learning’s and drive progress.

Roundtable attendees:

John Allan, CBE Chairman, London First
Naomi Smith, Executive Director Campaigns, London First
Toby Lloyd, Head of Policy, Shelter
Kersten Muller, Partner, Grant Thornton
Ian Tasker, Director, Grant Thornton
Jamie Cowen, Head of Investment & Planning, Sainsburys
Marc Vlessing, CEO and Co-founder, Pocket Living
Andrew Saunderson, Director, Transactions & Special Projects, Grainger plc
Phil Hooper, Head of Residential, Real Estate Finance, Royal Bank of Scotland
Emma Cariaga, Project Director, British Land
Anthony Impey, Managing Partner, Optimity
Alex Williams, Director of Borough Planning, Transport for London
Matt Rudling, Director of Customer Services, UK Power Networks
Nigel Wilson, CEO, Legal and General
Mick Sweeney, Group Chief Executive, One Housing
Hugh Taylor, National Head of Housing, HSBC
Cllr Matthew Bennet, Cabinet Member for Housing, Lambeth Council