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What Does The London Mayoral Election Mean For the Property Market?

May 5, 2016

The race to replace Conservative Mayor Boris Johnson is over; today, Londoners will vote for who gets to run the capital for the next four years.

The election is being billed as a “referendum on housing", and Londoners have explicitly expressed that housing is their number one concern, and the issue that may well determine the vote.

So which candidate is best equipped to fix the capital's housing crisis?

Housing crisis explained…

London needs houses - and lots of them. There have been a number of estimates on how many new homes should be built each year to meet the growing demand, ranging from 50,000 to 100,000. Last year only 25,000 homes were built, and to make matter’s worse, London’s population is set to grow from 8.6 million people to 10 million by 2031.

This severe lack of supply has pushed up prices to an unaffordable level, and NewStatesmen research for London Councils recently reported that a third of adults said that costs are pushing them to consider leaving London.

While the number of households in the capital have risen in the past 10 years, the percentage of home-owners plunged to under 50%.

What do our candidates propose?

The leading candidates, Zac Goldsmith and Sadiq Khan, put forward their ideas on new homes in the capital during a parliament debate on the Housing Bill.

The Government is proposing to extend the right-to-buy to housing association tenants, with a pledge to replace every social home bought with an affordable one. It is also planning on introducing a new definition of affordable homes to be any property up to £450,000 within the capital.

Both Khan and Goldsmith introduced amendments during the debate. Khan said he wants the money from the sale of properties in London to be ring-fenced and spent in capital, whereas Goldsmith vowed a two for one offer, whereby two affordable homes are built for every one housing association property sold - a policy which is now adopted by the government.

But how exactly do the candidates plan to deliver more affordable housing for London?

Conservative Zac Goldsmith’s Housing Plans

  • Double home building to 50,000 a year by 2020 and ensuring development is in keeping with the local area
  • Give Londoners the first chance to buy new homes built in London
  • Ensure a significant proportion of all new homes are only for rent and not for sale
  • Launch a pan-London investment fund for overseas investors to finance new homes
  • Focus on releasing publicly-owned brownfield land
  • Put empty homes back on the market
  • Make three-year leases standard, giving more power to tenants
  • Ensure rouge landlords are brought to justice

Labour Sadiq Khan’s Housing Plans

  • Deliver 80,000 new homes in London each year, 50% off which will be genuinely affordable
  • Set up a new team at City Hall dedicated to fast-tracking the building of genuinely affordable homes to rent and buy
  • Establish a London-wide not-for-profit lettings agency to promote longer-term, stable tenancies for responsible tenants and good landlords across London
  • Use mayoral powers and land to stop ‘buy-to-leave’ and to give ‘first dibs’ to first-time buyers and local tenants
  • Bring forward more land owned by public bodies like TFL and use the Mayor’s new homes team to develop that land
  • Create a new form of affordable housing, with rent based on a third of average local income, not market rates
  • Launch a new, affordable form of tenancy, giving tenants the chance to save for a deposit
  • Work with boroughs to set up landlord licensing schemes - naming and shaming bad landlords and promoting good ones

Whose plan will come to fruition? Only time will tell…


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Comments

Vicky Talbot-Rice
5 May 2016
Im delighted that there will be action against rogue landlords, but what about rogue tenants For Landlords going in for 3 year leases could be risky. What if your tenant stops paying

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