Knight Frank report says 66% fewer social rent homes were built in the capital in 2017/18 than in 2015/16
The number of homes built in London for social rent fell by two thirds in 2017/18 compared with those delivered in 2015/16, while the number of affordable homes delivered via section 106 over the same period rose by 70%, according to new research.
The latest London Residential Development report from agent Knight Frank said the proportion of shared ownership had more than doubled in three years. This trend was likely to continue as land prices took time to adjust to the new affordable housing threshold policy, the report added.
The challenge to increase delivery of affordable housing via section 106 was likely to grow amid a wider environment of declining residential construction, Knight Frank said.
“The onus to hit ambitious targets is likely to fall on registered providers, who are in turn increasing construction of homes for market sale to offset a lack of grant funding.”
The planning environment in the capital also remained challenging, Knight Frank’s report said. Official statistics on planning applications revealed 88% of major applications were decided within 13 weeks the third quarter last year, “although the complexities of negotiating section 106 agreements and discharging planning conditions remained a source of delay and uncertainty for developers.
“The mayor’s 35% affordable housing threshold, that climbs to 50% for projects on public land, is creating further challenges as land values take time to adjust to new policies,” the report added.
Construction costs have risen 14% in three years, which combined with economic uncertainty was exerting pressure on land values, Knight Frank said.
And just five of London’s 33 boroughs – Croydon, City of London, Hammersmith & Fulham, Haringey and Hillingdon – met their targets for housing need during 2017-18, and 20 delivered less than 50%.
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