As Greater Manchester Mayor Andy Burnham continues to champion his vision for rebalancing economic and political power across the UK, a closer look at his proposals reveals an unexpected silver lining – potential solutions to London's crippling housing crisis. The 'world's greatest capital city', as Burnham aptly described it, is struggling to keep pace with spiralling costs, leaving residents to bear the brunt of astronomical housing expenses.
London's poverty rate stands at a staggering figure, outstripping other regions in England. Data shows that despite higher average wages, Londoners often spend 40% of their income on housing – significantly higher than the national average of 36%. The disparity is stark when compared to other areas like the North East, where house prices are only five times average earnings, a marked contrast to London's 10.6 times.
The recent downturn in London house prices has halted new construction projects, leaving some 300,000 homes with planning permission unbuilt. Experts point to rising costs, interest rates, labour shortages, and post-Grenfell regulations as key contributors to this stagnation. Meanwhile, Mayor Sadiq Khan's reduction of the affordable housing target from 35% to 20% has sparked judicial review from seven London councils, who argue it will exacerbate the problem.
These councils are already grappling with the crisis-level costs of housing homeless families in temporary accommodation. The government's freeze on local housing allowance is further straining resources, leading to evictions and widespread calls for rent controls – a policy supported by 71% of people in England. Interestingly, Burnham's plan to allocate the £39 billion national housing budget to social projects could offer an innovative approach to addressing these issues.
While London mayors have consistently fallen short on housing targets, Mayor Khan's administration did achieve a notable increase in council home starts – doubling the number of new council homes built compared to the rest of England. Burnham's vision, though largely focused on regional rebalancing, offers an intriguing opportunity for policymakers to think outside the box and find innovative solutions to London's pressing housing crisis.