As Britain’s biggest, most expensive and most populated city, London is taking the brunt of the UK housing crisis, with one in 50 Londoners living in temporary accommodation. So, what can be done to fix this pressing issue?
\In our latest blog, we’re exploring how and why affordable housing development is the solution.
What is the UK housing crisis, and how did it happen?
The UK is in the grips of an affordable housing crisis due to the rising population, wealth inequality, and the restrictions around building new homes.
- Approximately 340,000 new homes are needed in England every year
- 145,000 of new homes being built across the UK should be affordable
- The government aims to build 300,000 homes a year
- However, only around 233,000 were built in 2021/2022
So, how is this affecting London in particular?
- The average monthly rent in London in 2024 is £2,121, compared to £695 in the North East of England
- One in 50 Londoners was living in temporary accommodation in 2023
- Research by Savills revealed the number of private rentals available across London since the pandemic had dropped by 41%.
Why is affordable housing the answer?
Affordable housing is the solution to the UK housing crisis, particularly in London, where demand is so high.
Counteracts the cost of living
To mitigate the effects of the cost of living crisis, affordable housing provides housing options that are within reach for a larger chunk of the population, including average and low-income families and individuals.
Reduces homelessness
The high cost of housing is one of the major contributing factors to homelessness, so affordable housing schemes can help reduce homelessness by providing stable, secure housing options for those already homeless or at risk.
Brings economic stability to London
A quarter of Londoners live in poverty after paying for their homes.
Affordable housing supports a more balanced economy as it frees up income to be spread across different parts of the economy, rather than Londoners using the majority of their income to pay for housing.
Improves social equality
There’s huge wealth inequality in London, with people from lower incomes being priced out of the city. By building affordable housing in London, we can create a more inclusive and balanced community and address the social inequalities that currently exist.
Promotes sustainable development
Modern homes prioritise sustainable building practices and environmentally conscious planning, which creates more climate-conscious urban communities.
How much Government funding is needed?
The Mayor of London, Sadiq Khan, successfully secured £4 billion from the Government to create new affordable homes in London as part of the London Plan – Homes for Londoners: Affordable Homes Programme 2021 – 2026.
However, this simply isn’t enough to meet the needs of Londoners.
In 2021-22, under 3,500 affordable homes were built in London.
As this Inside Housing article sets out, this needs to increase by more than 10 times – to more than 45,000 – to meet the real needs of the population.
And as the article goes on to state, an investment of £15 billion a year on affordable housing for 15 years may sound high, but it’s the amount currently being paid out in housing benefits to private landlords.
We believe a positive future London housing market is within reach, and it involves drastic action, positive collaboration, and progressive innovation to definitively solve the crisis we’re experiencing.
Is it difficult to secure planning permission?
Securing planning permission for new housing – especially in major cities like London – can be challenging, expensive, slow, and complex.
As specialists in planning applications, we are extremely knowledgeable and capable in securing consent for new developments.
However, a series of 2024 planning reforms set to speed up and streamline the process should make it quicker and simpler to get the green light on homes across London.
Different types of affordable homes
Home ownership schemes
Affordable home ownership
Housing is sold at least 20% below market value, including equity loans and rent-to-buy schemes. Public affordable housing funding ensures these homes stay affordable for future buyers.
First homes
This scheme helps first time buyers and key workers get onto the property ladder by purchasing homes with a minimum 30% discount.
Shared ownership homes
Buyers purchase between 25-75% of a home’s value and pay rent on the rest, which is owned by a housing provider.
Rental schemes
Affordable rent
Social housing capped at 80% of market rent, this is available through government grants or local authorities for anyone eligible for social housing.
Intermediate rent
Rents are up to 80% of market rate, offering tenants a chance to save for a house deposit and potentially buy their home in future.
London affordable rent
Set and regulated by the Greater London Authority, with landlords registered.
Social rent
Managed by local authorities or registered providers, with rental rates set by national guidelines.
Unlock the potential of affordable housing development to solve London’s social housing crisis
At Collaborate Living, our property and planning specialists work with housing associations to deliver affordable new homes that meet the needs of the UK population.
With a London office close to Tower Bridge, we are actively looking to partner with London housing associations, local authorities, architects, engineers, and construction partners to build homes that meet our city’s affordable housing needs.
Get in touch with our London team to arrange a meeting at your convenience.