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London Assembly seeks homes boost from small firms

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London Mayor Boris Johnson has been urged to parcel up more of the capital’s surplus public land into smaller-sized plots to boost housebuilding by smaller developers

Members of the London Assembly’s Housing Committee said large developers increasingly dominated the capital’s housebuilding industry but did not have the capacity or the motivation to deliver the levels required.

The mayor has proposed a long-term target of 42,000 new homes a year to be added to the capital’s stock, but only 21,470 new homes started construction during the 2013/14 financial year, according to figures contained in a London Housing Market Report published by the Greater London Authority.

The committee called on Johnson to encourage new entrants to the market who were less likely to have significant land banks and therefore more likely to build out their sites quickly.

In a letter, it urged the mayor to commit to a range of measures, including reserving some plots specifically for small and medium-sized developers by dividing large sites set for disposal into smaller chunks, and requiring that Home Zone frameworks set to be agreed with London boroughs maximised delivery by small firms.

The letter argues that ‘many’ large developers are not looking to increase their output, choosing to operate business strategies that sought to avoid increasing the number of homes built.

It warns that selling land to large developers could result in sites subject to development agreements going ahead at the expense of development on other land-banked sites - not resulting in a boost in housing capacity.

Committee chair Darren Johnson said small builders had an incentive to build their sites quickly but the high price of land across the capital made it increasingly harder for small builders to enter the market or to grow.

‘The mayor is going to great lengths to lobby the government to release disused public land and unlock housing development in London,’ he said.

‘But selling this land to large developers who already have land banks may not be the best way to increase the number of homes built in the capita.

‘There is only one chance to sell public land and the mayor has an opportunity to use it to diversify London’s concentrated house building industry by allowing smaller players to get a foothold in the market.’

Two weeks ago, speaking at the AJ’s More Homes Better Homes conference, London deputy mayor for housing, land and property Richard Blakeway admitted that the capital needed ‘to attract newer players’ to help deliver the thousands of homes required.

Blakeway said: ‘There are fewer developers than we had 30 years ago. We need to attract newer developers to the market. We have about 7,000 fewer than we had before the recession.’

He added: ‘This is a serious impediment. We need to attract newer players who will come up with complementary products and not necessarily compete with what the volume house builders do – for example people who do custom-build, purpose-built private-rent, or can specialise in the intermediate market and shared ownership. These are new products which could compliment and accelerate house building, particularly in London.’

 

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