The Spotlight on London Demand examines the challenges London will face with an ever growing population. Download here.

When the development of the Olympic Village in Stratford first began almost a decade ago, there was a clear challenge and an unmovable deadline: to build world class accommodation for thousands of athletes by 2012 as well as to provide much needed housing for Londoners as part of the regeneration of a neglected part of the capital.

A year on from the Games, East Village, as it is now known, is the site of 2,818 new homes spread over 67 blocks within a 27 hectare site. There is a new school for 3 to 18 year-olds, cafes, bars and 27 acres of parkland. That the project faced a series of obstacles, not least the 2008 financial crisis, only makes the achievement more remarkable. It proves what can be done when London pulls together to strike a common goal.

We should be building around 18 new East Villages every year, the equivalent of 50,000 homes, to meet the needs of a population that is set to expand by one million by 2021. The bulk of these homes, some 28,500 are required at the lower end of the market, both in the form of affordable housing and properties priced below £450 psf. Given that 70% of households earn less than £50,000 in London, demand falls as you move up the housing market.

Yet, builders’ focus on wealthier, equity rich and credit-worthy buyers since the credit crunch, means that a disproportionate amount of stock is being delivered at what we call ‘New Prime’ levels – at prices between £1,000 and £2,000 psf. There is a risk of over supply if this pipeline increases further or if current levels of demand fall away.

To satisfy the greater level of more tangible demand in lower price brackets, we must look to London’s outer boroughs – the doughnut ring in zones three and beyond. Development on the scale of East Village is rarely viable without extending and improving infrastructure. Funding for further rail and Underground lines south of the river is crucial. Current plans to extend the Bakerloo line beyond Elephant and Castle and the DLR to Bromley would encourage development in outer London town centre hubs.

We have been here before. London’s population last peaked at about 8.6 million in 1939. In the 1930s we were delivering just over 60,000 new homes a year in London as the country emerged from a global depression. Back then overcrowding was obvious and the need to clear slums were a great motivating force. We lack these visual instigators now.

Today, the signs of overcrowding lie behind closed doors: the young professionals forced to live longer with their parents, the house sharers doubling up to meet rising rents and businesses moving out of London because they can’t afford to house their workforce.

Population projections, however big, are never going to seem as pressing as East End slums of the 1930s. But London’s economic standing depends on its ability to house the very people who make the city tick. Failure to deliver the homes London needs would severely impact the city’s ability to compete on the global stage.

A massive task lies ahead. To meet this challenge London must emulate the drive and ambition we saw flourish in the Olympic Park. Projects on this scale require a common vision and a strong Mayor. Ultimately, London must work as one city not 32 boroughs.

Taken from
Spotlight: London Demand