Last week, Labour’s Sadiq Khan was voted in as the new Mayor of London, a role he takes on from the Conservatives’ Boris Johnson, but while the politics driving the new mayor will be decidedly different to his predecessor’s, one of the biggest challenges he faces in office will not.
The property market in London has been creaking for some time now. With the increase in population picking up pace all the time, there are a shortage of homes, creating a supply and demand issue that has seen the price of properties rocket to over half a million pounds and the price of rent hit over £1,500 per month.
It’s an issue that has been plaguing the city repeatedly, but what will the new mayor coming into office mean for the housing market? According to his pre-election campaign, the good news is that Mr Khan backs the development of new homes, with a call for 50,000 new homes to be built every year, on top of the previous targets. If hit, this would mean London being in a better position to keep house prices and rental rises under control.
The problem is that the new mayor will face extensive challenges when it comes to making this a reality. Last year, London only hit half the target of 80,000 new homes being constructed, and with Mr Khan looking to increase the plan for development, will the capital’s construction sector be able to handle it?
Guy Grainger, the chief executive of commercial estate agents JLL, said one of the major problems the mayor faces is the skills gap in the building sector; there are not enough builders to help meet demand. As many as 28 per cent of respondents to a JLL survey cited this as one of the main challenges facing the market. Mr Khan will need to make sure this is addressed, with a focus on hiring and training in the industry to help drive up the number of skilled workers it has.
Another more prominent problem he must tackle will centre around land. With more than 8.6 million people housed in London, it’s a densely populated area already, so finding new land for development is key. When much of the land available is green belt, though, will he choose to unlock it? Last year, Mr Khan said that protecting green belt land was key to the future, but he faces real pressure from the property sector to backtrack and take a new approach.
In principle, we won’t be expecting to see much in the way of green belt development given past comments, but now the mayor has taken his seat in City Hall, it remains to be seen how he tackles a capital housing crisis that simply demands action.