How to fix London's toxic housing market

The capital is unaffordable, precarious and joyless for too many people, mostly thanks to our dysfunctional housing provision. As the Budget is revealed, London's eminent property experts tell Anna White what needs to be done

- Anna White

The London housing market is not broken, “it is entirely rotten”. The foundations have crumbled and any quick-fix announcements in today’s Budget will do little more than paper over the cracks. We need an urgent solution if we are to avoid a brain drain, an exodus of key workers, and the glissade into a city where no ordinary people can afford to live.

“London and the South-East are not just unaffordable, they are extravagantly unaffordable,” says Paul Cheshire, professor emeritus of economic geography at the London School of Economics. “It is terrible what has happened, in particular to the under40s,” he continues, referring to how difficult it is for young tenants to both make their rent and save to get on the property ladder.

The average house price in the region is now 13 times household income, compared to an international standard of three (according to Demographia). Such levels of unaffordability are “bad for the capital’s economy and stop us attracting the best and the brightest [talent],” Cheshire adds.

This toxicity reverberates up the housing ladder. The cost of a house (rather than a flat) has increased 24 per cent since 2019, forcing second- and third-steppers to move out of the capital or languish in homes that cannot meet their needs.

“Thousands of ordinary London families are fed up with high-rise flats they can neither afford nor fit into… which are too often money boxes for foreign cash,” says Jackie Sadek, chief operating officer of UK Regeneration. “The London housing market is rotten and every aspect of it needs rebuilding,” she says.

CAN WE BUILD OUR WAY OUT?