Congratulations to the new mayors of Bristol, Salford and London. On housing, on infrastructure and on much more besides, you have your work cut out.
Joe Anderson, the returned mayor of Liverpool, will be able to advise on how to balance the competing demands on your time. From this industry, support for development will be demanded, and each of the mayors has, in one way or another, put development at the heart of their pledges.
On being re-elected, Anderson said he would now press ahead with his mayoral pledges, including building 10,000 new “rent-to-buy” homes. In Bristol, Marvin Rees has talked of the “need to build homes and protect people in the private rental sector”. And in its round-up of the seven challenges facing Salford’s Paul Dennett, the Manchester Evening News has at number one: “No more posh flats which local people can’t afford.”
Meanwhile, for Sadiq Khan in London, it is all about housing.
The passing distraction of Brexit aside, these mayors face a perfect storm of the key current political issues: housing provision (a political hot potato not just in London, but across the country); the cultural shift from a home-is-my-castle belief to Generation Rent; the real meaning of devolved political power; and infrastructure renewal.
It was all there in Khan’s victory speech at the weekend. He talked of his “burning ambition” to provide “a decent and affordable home and a comfortable commute” for all Londoners.
To do so he will have to work closely with central government – a true, unprecedented test of devolved power. The first London mayor, Labour’s Ken Livingstone, worked with Labour governments. His Conservative successor, Boris Johnson, worked with predominantly Tory ones. For the new mayor and his cabinet, let’s hope grown-up conversations have already begun when it comes to housing.
■ This week, Barratt Developments said it had given up on any ambition it might have had to develop in the heart of the capital (p31). “In London we are focused on land opportunities in Zones 3-6; we have not been able to secure opportunities in Zones 1 and 2, given our minimum hurdle rates.” (For completists, those hurdle rates are 20% gross margin and 25% return on capital employed.)
Yet for others, such as Residential Land’s Bruce Ritchie, the top coming off the central London market offers opportunity (p60). A year ago developers were looking to sell at up to £1,600 per sq ft. “Now I have two or three blocks that I could buy for between £850 and £1,050 and I am sitting there thinking, do I really want to do that, or is there still more to come?” he says.
It is unlikely Zones 1 and 2 will make the most meaningful contribution to the homes London needs. Expediently, Khan’s manifesto does not give precise detail on how many homes he wants built each year; it simply states that London needs “more than 50,000” new homes delivered annually.
Nevertheless, according to EGi’s London Residential Research, for all the criticism of the 400 residential towers in London’s planning pipeline – and the assumption that too many of these flats are for overseas buy-to-leave investors – without them the capital’s housing provision would be in an even sorrier state (p89).
Last year may have seen a record 30,000 private homes start construction, but take away permitted-development schemes and those in towers of 20-plus storeys and starts were actually down on 2013 and 2014.
No wonder the government is considering giving a very visible kick-start to housing, planning and infrastructure in next week’s Queen’s Speech. A bill is mooted, less perhaps because primary legislation is needed to accelerate the work of, say, the National Infrastructure Commission, and more to restate its commitment to the cause. If that’s what it takes to ensure cities across the country can deliver the homes and connectivity they need, it will be welcomed.
To send feedback, e-mail damian.wild@estatesgazette.com or tweet @DamianWild or @estatesgazette
