Meeting housing targets could cut London rents by £251 a month, report claims

A report by the Centre for British Progress (CBP) argues that building enough homes to meet national targets would significantly reduce housing costs across the capital, where residents currently spend more than 40 per cent of their pre-tax income on rent.Labour has pledged to build 1.5 million homes across England between July 2024 and the next general election, including 88,000 homes a year in London. However, ministers have already admitted there is only a “slim chance” of reaching the target.Sir Sadiq Khan's London Plan also suggests that, even under favourable conditions, only around 55,800 homes can be built annually in the capital over the next decade.The CBP report argues that increasing supply would help drive down rents through so-called "moving chains", in which people move into new-build properties, freeing up older homes for others lower down the housing ladder.According to the analysis, meeting national building targets would increase London's housing stock by 2.3 per cent annually. Over five years, that would lead to rents being 9.7 per cent lower than they would otherwise have been.From 2005 to present, London’s population rose faster than new properties were builtLDRSFor tenants renting a typical two-bedroom flat in inner London, that would amount to a saving of £251 a month by the fifth year, the report claims.The think tank points to a longstanding mismatch between population growth and housebuilding as a major driver of rising costs. Between 2000 and 2019, London's population grew by 1.65 million people, while enough housing was built for only 1.39 million.Rob Blackie, who co-authored the report and is seeking the Liberal Democrat nomination for the 2028 London mayoral election, said housing shortages had pushed rents to unaffordable levels.He said: “London’s rents are far too high, because our Mayors have failed to build enough homes for the last 25 years.“The good news is that we can bring down rents by hundreds of pounds a month if we increase housebuilding.Read More“If elected, cutting rents will be my top priority.”How would these savings differ by borough?By year five, even in the cheapest parts of London, renting a two-bedroom flat would cost £150 a month less.Barking and Dagenham - £184Kingston upon Thames - £188Richmond upon Thames - £238Hammersmith and Fulham - £280Kensington and Chelsea - £367The report also suggests that boosting supply would improve living standards. Authors found that, on current building trends, a typical Londoner's income after rent would effectively shrink by 0.37 per cent each year. If housing targets were achieved, that figure would instead rise by 1.15 per cent annually.Co-author David Lawrence said the impact would be greater than many traditional cost-of-living measures.“The Government is right to look for ways to give families breathing space,” he said. “The biggest one is hiding in plain sight.“We find that hitting the Government’s building targets would reduce rents in London by £251 a month for ordinary households.”The report also claims more housebuilding could ease pressure on councils struggling to accommodate homeless families.Even if only 10 per cent of new homes were delivered as social housing, researchers estimate the number of London households living in temporary accommodation could fall by as much as 59 per cent, saving local authorities around £435 million a year.