London development report – how is coronavirus impacting the housing market?
How was London’s residential development market performing before the outbreak of coronavirus, and what does the pandemic mean for housing delivery going forward?
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- The number of net additional dwellings added to London’s housing stock rose 14% in 2018/19
- The number of units that started construction in 2019 was 19,166, a drop of 43% compared to the 2015 peak
During 2018-19, some 36,161 net additional dwellings were added to Greater London’s housing stock, a 14% increase in new homes compared to the previous year.
But the increase in delivery is still below Mayor Sadiq Khan’s revised ten-year new homes target, which came down from 65,000 to 52,000 a year in December, in line with recommendations from planning inspectors reviewing City Hall’s draft new London Plan.
Moreover, coronavirus will inevitably lead to a pause in new homes delivery. Crucially, this cessation of activity comes at a time when completions volumes in England have been steadily ticking upwards, and just weeks after the government reiterated its ambition to build 300,000 homes a year by the mid-2020s.
It also comes at a time when build costs are already high, fuelled by regulation changes and labour shortages. Coronavirus could ultimately have implications for supply chains with companies seeking to diversify supply sources to minimise disruption risks in future.
Despite these challenges, the government has taken steps to protect the market and ensure delivery can continue where possible. Some housebuilders are scaling back their operations temporarily, but others are continuing, and current government advice is that they can still operate, though circumstances are liable to change.
The government is also consulting on ways to expand permitted development rights to include the upwards extension of existing residential premises and the repurposing of empty commercial, industrial and residential blocks as ‘new build’ housing.
These are among several ideas designed to boost delivery that will form part of a Planning White Paper due to be published this year.
However, it is clear that meeting that stated goal of 300,000 homes a year will require decisions that go beyond the next few weeks or months.