David Lunts, London director of the Homes and Communities Agency, held a seminar on Monday in which he stated that affordable housing had dragged Housing Associations and developers through the recession.
As part of the London School of Economics Lent Term Seminar series, the London director told an audience of lecturers, politicians and masters students how a staggering 70% of houses built since 2007 were directly helped by HCA investment.
Affordable housing has been directly responsible for 40% of new homes since 2007 and the two biggest providers of these have been private developers, Berkeley Homes and Barratt Homes.
Lunts expressed concerns about the future of housebuilding in London throughout the session: ?We are in quite a lot of trouble,? he said before detailing how the London average first time buyer deposit of £86,400 was unsustainable being as it is 73% above the national average.
He warned of a planning freeze should the new rent policies detailed in the Localism Bill not work as they are intended. Lunts said that London will become more polarised between strong and weak market areas because of welfare and development regimes.
As a solution to some of the housing shortage problems facing the capital, Lunts offered the idea of institutional investment into long-term private renting, as is common in developed countries worldwide. Ideas also mooted were a greater role for public land and further help for first time buyers.
On a more positive note, he was enthusiastic about HCA London being placed under the umbrella of City Hall, in a move that will most probably see Lunts returning to the GLA where he worked until 2008. But that was the only notable up-beat aspect of the future of housing in London.
Labour MP for Greenwich and Woolwich and former housing minister Nick Raynsford was part of the audience and made clear his concerns about two government departments. He worried that DWP?s Housing Benefit changes will bring rents down contrary to CLG which is making provision for Housing Associations to raise rents. It was a point that Lunts accepted and he argued that, because rents are going up 17% year on year, the idea that London will have reduced rents is hard to believe.
Lunts thought that the increase in market rents as stipulated in the Localism Bill would make Housing Associations more likely to become developers. And it may have to be those that lead a much needed housebuilding recovery in London.