Today may have no net effect at all on the supply of new homes. This 400,000 figure might simply slip within the UK totals already expected – unless the government announces real plans to ensure more planning approvals are granted overall.
The crunch is sharpest in London, as recognised by the Chancellor. But again, no answers have been given about where new builds in London will actually go. Help with higher purchase prices is great news, but it’s ultimately a treatment not a cure for a lack of new homes. Everyday Londoners aren’t simply held back by prices, but also by supply.
Planning can be a nightmare for home builders in London – unless the government intercepts applications and approvals, enough extra new homes will not be completed. In particular, outer boroughs of the city are four times more likely to reject applications for new homes, which puts extra emphasis on inner London to supply tens of thousands of homes a year.
The exceptional nature of housing in London is starting to get the attention it deserves. ‘London Help to Buy’ will help those buying a property up to £600,000, providing overdue and vital support for people trying to get on the ladder. But a third of London’s postal districts already have higher average prices than this – according to our upcoming London Hubs Tracker – meaning buyers will soon find themselves ineligible for the scheme and squeezed out of many areas. After a short term boost for a year or two, addressing only demand will once again prove insufficient. More homes are the answer, Chancellor – and we need to start planning them right now.
