Report on housing in London highlights need for long-term, multi-pronged reform

Its Developing London report, supported by the G15 group of large social landlords, Barratt London, the Royal Borough of Greenwich and Impact on Urban Health, argues that London’s housing challenge is not only about overall housing supply, but also about who can access homes and how housing is distributed across the city.

Centre for London has suggested a three-pronged approach to solve a number of the key issues:

1. Increase the number of social and affordable rented homes, by radically expanding the capacity of local authorities and housing associations to deliver and acquire homes for social and affordable rent.

The number of social and affordable homes in London has fallen by 20% per 1,000 people. This is fundamental to understanding why housing need in the city is more poorly met than in 2002, despite having the same number of homes per head overall, Centre for London argued.

To enable the significant expansion of social and affordable stock London needs, it recommends a new settlement for affordable housing in the capital, built around:

• A bigger social and affordable homes programme – backed by an extra £912m a year.
• Greater freedom to target funding where housing need is greatest.
• Robust, reliable counter-cyclical routes for the social sector to acquire homes.
• A resilient long-term financial foundation for councils and housing associations through a Greater London Housing Fund.
• A new, municipal Build-to-Rent model.

2. Address demand-side factors which accelerate price inflation as well as drive inequalities and inefficiencies in the circulation and distribution of housing stock.

The availability of dwelling space in London has increased substantially over the last twenty years. But these gains have been unevenly distributed, accruing almost exclusively to affluent owner-occupiers, Centre for London said.

Measures it proposes include:

• Reform property taxation through a fairer and less distortive partially devolved Proportional Property Tax, scrapping Council Tax and removing Stamp Duty on movers.
• Curb investment demand in parts of the market where it pushes up prices without reliably increasing supply, while channelling investment towards genuinely additional homes.
• Create practical pathways for better use and circulation of existing homes, including a London-wide ‘Help to Move’ scheme.
• Introduce a new ‘Right to Sell’ offer that enables homeowners to unlock equity.
• Give councils stronger tools to tackle the most dysfunctional parts of local housing markets.

3. Accelerate private housing delivery and ensure long-run price stability by making it cheaper and easier to build in London.

The evidence is clear that growth in London’s housing supply is fundamental to affordability, the thinktank said.

However, even in recent years, when London’s housing delivery was at its highest, new supply has been far below that needed to stabilise house prices.

Centre for London says reforms should:

• Make the planning system more predictable and less risky, with a clearer, more rules‑based approach so delivery is less dependent on slow, uncertain negotiations.
• Unlock more small and medium‑sized sites and support SME builders.
• Clarify and streamline building standards and compliance processes.
• Align planning with the realities of housing finance, so policy expectations, infrastructure contributions, and delivery monitoring are transparent and investable.
• Create a simpler, clearer approach to developer contributions towards affordable housing and infrastructure.
• Ensure any new first-time buyer support scheme is time-limited, tightly-targeted, and partly developer-funded, and is focused on additionality.

The report concludes that “marginal changes will not be enough”, encouraging multiple solutions to be employed together as a coherent package rather than a menu.

“If action is taken on only one aspect of the London housing problem, we will entrench the system that needs change.

“And, with a new London Plan on the way, two confirmed new towns in the city, and a Government that remains committed to increasing housing delivery, the time to act is now.”

Commenting on the report, G15 Chair Ian McDermott said: “This is a thoughtful and ambitious report that reflects the scale and complexity of London’s housing crisis. One of its most important contributions is highlighting that the challenge is not only about the number of homes, but about who can access them and how housing is distributed across the city.

“The report rightly shows that many Londoners are experiencing worsening overcrowding, insecurity and unaffordability even where overall housing supply has grown. That underlines the importance of increasing the supply of genuinely affordable homes alongside wider housing reform."

McDermott added: “We particularly welcome the report’s focus on increasing social housing delivery capacity, improving grant flexibility, supporting acquisitions during market downturns, and creating more stable long-term funding mechanisms for affordable housing. London needs practical reforms that improve delivery across the whole system while ensuring social housing remains central to the city’s long-term housing strategy.

“The report also makes an important contribution to the debate on how housing and tax policy can better support mobility, affordability and long-term investment in housing. London’s housing market operates differently from the rest of the country, and there is a strong case for greater fiscal devolution so the capital has more flexibility to respond to its specific housing pressures and invest in the homes and infrastructure Londoners need.”

Harry Rodd