06.11.2017 Private businesses offer small solutions to London’s housing crisis

06.11.2017 Private businesses offer small solutions to London’s housing crisis

The UK along with many other advanced economies, is facing a major housing affordability crisis. Average house prices are nearly eight times that of peoples’ incomes, and up to 39 times in parts of central London.

The systemic government failure to invest in affordable housing has resulted in the need to build over 40,000 genuinely affordable properties per year in order to meet the housing need and deal with the backlog. As a result, a number of private businesses, consisting of professionals, such as architects, property developers, artists and entrepreneurs, are now proposing solutions to the London’s housing crisis.
For instance, Land Converter started building prefabricated, energy-efficient modular houses on vacant rooftops, decayed garden sheds or derelict garages. However, with their smallest two-bedroom 52 square metre homes, costing about the same as an average two-up-two down London terrace in the same area, the Land Converter’s prices are still above what most young people can afford.
Other architects and housing developers such as Mecanoo, Studio Weave, Jamie Fobert Architects, Pocket and Naked House have also proposed imaginative solutions to the housing crisis. Their proposals address issues of affordability, density and the future of mass housing, by adapting cottages, flats, terraced houses to suit contemporary lifestyles. For instance, Naked House, supported by finance from private social investors and the Greater London Authority, secures land from local authorities at an affordable price and helps people to build their stripped back to the barest essentials homes, with no internal walls, floors or finishes. They intend to sell these leasehold properties for between £150,000 and £350,000 — well below the £482,000 average house price in London, with the requirement that subsequent buyers will be able to benefit from the discount, avoiding people buying the property just in order to resell it at a maximum price. Pocket Living, another affordable housing developer, sells one-bedroom flats at a discount of at least 20% to “intermediate market”. This is aimed at those earning an annual salary of £30,000-£66,000, which is too much to qualify for social housing, but too little to buy outright on the open market. Marc Vlessing, the chief executive of Pocket, obtained government funding of £25million to build affordable micro-homes for higher-income homeowners, which are usually sold for between £165,000 in Zone 4 and £332,000 in Zone 1. Vlessing’s business has grown from building 30 houses a year in 2005 to over 250 in 2016. Since Sadiq Khan became Mayor of London he has been working on rebuilding London’s housing system from the bottom up. The Mayor has insisted that developers stop focusing on construction of luxury penthouses and that the government should invest more in building new affordable homes. Khan believes that 65% of new homes in London should be affordable and urged the government to use the budget on 22 November to increase funding levels for affordable homebuilding in London. The Mayor has pledged to build 90,000 new affordable homes by 2020/21 and secured £3.15bn from the government for launching his Affordable Houses Programme. The Mayor of London has also stated that, despite the scale of the challenges, if the government provides the funding and support requested, the problem of London’s housing crisis can be fixed once and for all.

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