Sadiq Khan’s housing policy is good for small builders – and Londoners

Sadiq Khan’s housing policy is good for small builders – and Londoners

The underlying cause of London’s housing crisis is a long-running mismatch between a high level of need and a low level of new housebuilding.

The number of new homes being built every year in London has been stuck around the low 20,000s for some time. According to the mayor’s draft housing strategy (pdf) for the capital, published on 6 September, London needs enough land to build more than 50,000 new homes every year for the next 25 years.

The strategy correctly comprehends that any expansion of the delivery of new homes on this scale requires a more diverse and dynamic housebuilding industry. As part of this, it is important to focus attention on the number and range of different builders we will need.

The number and output of smaller housebuilders have declined in recent decades and this trend has accelerated in the wake of the 2008 financial crisis. In 2008, according to the National House Building Council, there were 5,476 builders in Great Britain, building from one to 100 homes a year. By 2016, that had fallen to just 1,920. This contrasts with the early 20th century heyday of London housebuilding, when whole suburbs were built largely by smaller local builders, often constructing row upon row of terraced houses to pattern book designs.

The constraints and barriers facing smaller-scale builders range from a labyrinthine planning system to difficulties raising the required finance. However, securing planning permission for suitable and commercially viable small sites remains the greatest impediment to these firms. The reasons for this range from the administrative complexity and costs for planners when processing large numbers of small sites to the often disproportionate resistance London boroughs face over smaller-scale development.

It is to the housing strategy’s credit that it seeks to rectify this by, among other things, putting in place a presumption in favour of suitable smaller-scale development. It also trails plans to better link up small builders with those disposing of smaller units of public land.

It is not just the members of the Federation of Master Builders who should welcome this – all Londoners should be cheered by these proposals. By making much more use of the many small bits of land dotted all over London, we can deliver many more homes by locally based firms building well-designed micro developments.

Delivering affordable housing on smaller private developments can be more challenging but where there is a need for this, councils should seek to link up and create partnerships between housing associations and small builders. Just as importantly, if we can succeed in delivering more homes through the cumulative impact of many more smaller developments, the number of affordable homes should also rise, and we can begin to even out the mismatch between supply and demand that is responsible for the capital’s housing crisis.

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