What does Sadiq Khan mean for London’s Housing Crisis?

Industry Insight May 9th, 2016
What does Sadiq Khan mean for London’s Housing Crisis?

With the recent success of the Labour candidate, Sadiq Khan, we ask how he aims to tackle the current housing crisis.

On Friday 6th of May, Londoners cast their votes for their local councils and the future London mayor. The campaign leading up to the vote had been a relatively vicious mayoral campaign, with a high-degree of smearing from both the Labour and Conservative candidates. On the day, Khan picked up 44% of first preference votes, whereas Zac Goldsmith won 35% of the vote – 1,310,143 to 994,614 votes respectively. Arthur investigates Khan’s policy to address the current London housing crisis and whether he can make any headway into change.

Khan’s parental background makes him the son of a  bus drivers and a seamstress, both Pakistani immigrant. He grew up as 1 of 8 children in a 3 bedroom public housing apartment. He has stated previously in the campaign that he feels he was lucky to grow up in a secure, affordable home, a privilege which many young Londoners are now increasingly being denied.

In an article in The Spectator, they argued that the reason Sadiq Khan was successful was primarily due to his property policies. In the current system, supply is now in an artificial shortage, while demand is not rationed at all. Thus, the market has been favouring existing property owners over those who are unable to get onto the property ladder.

One of Khan’s key policies is not not just increasing the supply of housing in the London market, but to increase the supply of affordable housing, relative to the average income of an area. Khan has stated that he wants 50% of new construction projects in an area to be affordable homes to help reduce the housing crisis. However, some developers have already made comments that state that this is unattainable. Firstly, the high cost of land in London means that some construction sites just cannot keep costs low enough to deliver affordable housing. Moreover, a professor at the London School of Economics suggests that this policy depends on confident and optimistic property investors. If the market experiences a downturn, then the investors may just stand back and wait till it picks up again, worsening any existing supply problems. To find out more about Khan’s policies for all elements of London, follow this link.

Interestingly, one barely reported change occurred in Cornwall on election day, which may become more widespread across the UK in future. 83% of voters in a referendum supported placing covenants on all new homes to limit them to being bought by full-time residents as part of the “neighbourhood plans.” It will be interesting to see if these local-orientated referendums become more popular.

Don’t forget to follow Arthur on social media for all the latest updates on the housing crisis.

 

 

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