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London’s Housing Shortage Is Getting A Lot Worse. Sir Stuart Lipton Has Some Radical Solutions

Sir Stuart Lipton brought two props to the meeting: a tin of beans, and a postwar book bearing the following 1943 quotation from Winston Churchill —

“I regard it as a definite part of the duty and responsibility of this national government … that in the years immediately following the war there will be food, work and homes for all.”

The veteran developer at Lipton Rogers is using both to make a point about what London needs if it is to build enough of the right kind of houses for its growing population.

Sir Stuart Lipton in 2018

The book on planning that featured Churchill’s words is fairly obvious: London needs radical political leadership. The beans? A tin of beans is simple, and it is what people want.

The gap continues to widen between the number of new homes London is building each year and the number it needs to build.

According to data from Savills released last week, London needs to build 90,000 to 100,000 homes a year to meet housing demand. It set that figure against the 66,000 a year target that the city has set, according to deputy mayor for planning regeneration and skills Jules Pipe. 

And that is just the target. In 2016, 41,000 homes were built according to Savills, and 47,000 will be built this year — fewer than half the number needed. The reasons for the shortfall have been pored over ad nauseam.

"The solution lies in planning — it's not about the bricks-and-mortar," Lipton said. “We have had 90 years of debate about what we should do and in that time there have been thousands of changes to the system. But today planning doesn’t reflect the change in society, the way people live and what people want.”

Lipton argued that people are ready for radical solutions to the current problem and that politicians at all levels need to step up to the mark.

“You need leadership from government and leadership locally,” he said. “Unless the solutions are radical they won’t have the support of the community. People want housing and they want employment, but they also want fun — that is something we’ve forgotten about life. People want cinemas, somewhere to dance and a community."

In practice this means to a large extent taking control on planning decisions out of the hands of local authorities, who are too easily hamstrung by the need to appease NIMBY voters.

The Montevetro building in Wandsworth

He argues that developers looking to build residential blocks of eight stories or fewer should receive planning permission as of right, and at transport hubs developers should automatically be able to build up to 20 stories.

Planning applications for major schemes should be taken by a national housing commission, outside of the political system, which will assess applications on the basis of need, design and fitness for purpose.

Developers should not have to build affordable housing on the same site, but should be required to build a non-negotiable number nearby.

As an example of how buildings of this height or higher can blend in with their surroundings he points to the Montevetro building on the banks of the Thames in Wandsworth. “That’s one extreme, and at the other end of the scale you have Georgian townhouses in Hackney where people are building six or eight stories next door quite comfortably.”

London School of Economics academic professor Tony Travers agrees that more top-down solutions are required, and said that more powers could be imbued with Mayor Sadiq Khan, again to stave off the threat of NIMBYism.

“If you empower the mayor over planning applications then boroughs can get the housing they need, while overcoming opposition from people who don’t want new schemes near them. The mayor is elected by a much wider electorate across greater London, and that electorate on the whole wants more housing. The boroughs might not like it but it would let them off the hook to some degree.”

Other solutions to add more capacity fast, Travers said, is to include giving the mayor greater compulsory purchase powers so that big sites can be more easily assembled; and also within reason give every homeowner the ability to add one story to their house so that as families expanded they will not necessarily need to move.

“That would produce a radical increase in the number of rooms in London,” he said.

Hackney is an area where townhouses sit next door to higher-rise buildings.

Both Travers and Lipton agree that the taxation system for property needs to change. Travers argues that a tax on owners that reflects value more accurately than council tax should be implemented; and Lipton argues that the various contributions put on residential developers such as section 106 and community infrastructure levy should be simplified even if they are not reduced. He claims they are a deterrent to smaller builders entering the market. The British Property Federation also recently called for a simplification of the property tax system.

Lipton also took on the controversial question of London’s green belt, which is a major barrier to development at London’s fringes.

He proposed it should be reclassified into three categories on the basis that not everything that is today classified as green belt is genuine countryside or natural habitat.

The first category would be untouchable. In the second, development would be permissible if there is broad public agreement; and the third would essentially be no longer classified as green belt.

“There is a lot of it that you wouldn’t recognise as green belt,” he said. “Under this formula if you were a local authority and wanted to sell off what is now considered green belt, then at least 50% of the proceeds should go to creating genuine green public spaces, parks that people really want to use.”

The words that Lipton — and indeed Travers — keep coming back to are radical and leadership. More and more it seems that this is an issue where it will not be the market that provides a solution.

“At the end of the day the government runs the show,” Lipton said. “People want to be looked after and they voted to be looked after.”

Churchill realised that homes were one of the three things people needed at a time of national crisis. The wider picture is very different in 2017, but today’s leaders could do worse than look at his list of priorities by being just as bold in their solutions.

Hear Lipton, Travers and a host of other leading names discuss the future of London at Bisnow's London State of the Market event.