What would the London Mayor candidates mean for the property market?

The London Mayoral elections take place on Thursday 5th May and the city’s housing has been top of the campaigning list for months.

House prices in 28 of 33 London boroughs are now at least 10 times average salaries, with prices in London’s most expensive borough, Kensington and Chelsea, now 38 times earnings, according to research by the property crowdfunding platform Property Partner. When Ken Livingstone was elected London Mayor in 2000, average property prices in London were 5.6 times earnings – now they’re 11 times, as the gap between average house prices and earnings stretched by 33 per cent since Boris Johnson was elected in 2008.

As well as voters, though, agents, developers and investors will also be paying attention. Labour candidate Sadiq Khan’s policy of affordable housing making up 50 per cent of all new developments, for example, has been slammed by the Federation of Master Builders, as the city’s lack of supply is a key underlying factor for the market’s performance in the future.

Brian Berry, Chief Executive of the FMB, says: “Khan’s 50 per cent affordable housing target is entirely unworkable – as has been observed by others that, 50 per cent of nothing is nothing, and this is a particularly pertinent issue for small developers. We urge the Labour candidate to introduce a small site exemption, similar to that which Central Government is bringing forward in its Housing and Planning Bill. This recognises that placing unrealistic affordable housing demands on small sites will leave thousands of projects across the city unviable and hugely increase the barriers to growth of smaller developers.”

Five hundred senior housing figures attended the National Housing Federation’s 100,000 Affordable Homes for London campaign hustings last week, with candidates from the five main parties highlighting the importance of housing to the election and expressing their desire to work with housing associations to end the city’s housing crisis.

In attendance were the candidates for the Liberal Democrats, UKIP and the Green Party. Labour’s Sadiq Khan MP and Conservative’s Zac Goldsmith MP shunned the hustings, but were represented by James Murray and Stephen Hammond MP, respectively.

Hammond highlighted Zac Goldsmith’s passion for working with housing associations to unlock public land and regenerate estates. UKIP’s Peter Whittle spoke of the “feeling of optimism about what we could achieve together”. The Green Party’s Sian Berry highlighted her intention to work with a diversity of housing associations and community land trusts to build truly affordable housing. Murray promised to put housing associations’ commitment to 100,000 new affordable homes at the “very core of the consensus we’re building about what London needs”.

The shortage of skilled construction workers was another theme on the night and in response to a question of how she would do things differently to the previous two mayors, the Liberal Democrats’ Caroline Pidgeon said “I’d set up my own building company at City Hall to drive affordable housing building, and I’d set up a construction academy to get skills into the industry as there is a skills shortage”.

National Housing Federation Chief Executive David Orr comments: “This election has been called a referendum on housing, and it’s fair to say that housing has decisively proved itself the most important substantive issue in the campaign. London will lose its vital diversity without truly affordable housing for all.”

What, then, will the main party candidates bring to the housing table? Here is guide to their property policies:

1Sadiq Khan – Labour Party

– Set up Homes for Londoners, a ‘new and powerful team at the heart of City Hall’ and building an alliance of councils, housing associations, developers, home-builders, investors, businesses, residents’ organisations to build more homes.

– Set target for half of all new homes to be ‘genuinely affordable’.

– Set clear guidelines for which developments the Mayor will “call in”, including where planning has stalled, and where opportunities to deliver more new or affordable homes are being missed.

– Establish a London-wide not-for-profit lettings agency for “good landlords” and work alongside boroughs to promote landlord licensing schemes to drive up standards, as well as make the case to government for London-wide landlord licensing.

– Name and shame rogue landlords and ensure tenants have access to this information online.

For the full manifesto, visit www.sadiq.london.

2Zac Goldsmith – Conservative Party

– Double house-building to a rate of 50,000 homes a year by 2020.

– Give Londoners first chance to buy new homes built in London.

– Ensure ‘significant portion’ of all new homes are only for rent and not for sale.

– Create new City Hall team of “Flying Planners” to provide expert support to the boroughs.

– Appoint a Chief Architect to drive development in London, building on Boris Johnson’s Design Panel.

– Help more Londoners buy off-plan through a new “Mayor’s Mortgage”.

– Instead of selling off public sector land to the highest bidder, insist the Mayor, NHS or MoD retains a ‘London Share’ in each development.

– Publish local authority planning approval rates and hold to account those councils that fail to build.

– Create more jobs for Londoners by setting up a new House Building Academy.

– Champion new building methods, including trialling the use pf modular houses on public sector land.

For the full manifesto, visit www.backzac2016.com.

3Caroline Pidgeon – Liberal Democrats

– Continue the Olympic precept and use it to fund building 50,000 council homes to rent and 150,000 for sale or for private rent, including rent-to-buy for first time buyers.

– Create a City Hall building company and a skills academy to train construction workers.

– Crack down on “rogue landlords who rip off private tenants”, by extending mandatory registration and offering long tenancies.

– Set a benchmark guideline that half of housing in new developments should be affordable for the majority of Londoners.

For the full manifesto, visit www.londonlibdems.org.uk.

4Sian Berry – Green Party

– Create a £500m additional fund for house-building by retaining what’s left of the Olympic precept (the council tax that funded the Olympics), raising the overall precept by 2 per cent, then borrowing against this fund.

– Establish a not-for-profit company in City Hall that will build an alternative to the big developers, parcelling up public land into plots that work for investors like housing associations, community-led groups, co-ops, councils and smaller developers.

– Set up a London Renters Union and lobby for the power to control rents.

For the full manifesto, visit www.sianberry.london.

5Peter Whittle – UKIP

– Encourage London borough councils and Registered Social Landlords when they make social housing allocations to prioritise people who have lived in London for at least five years.

– Establish a London register of brownield sites and prioritise homebuilding on such sites.

– Press the government to extend the New Homes Bonus.

– Set council tax on long-term empty properties in London at twice the level applying outside London. Serving members of HM Forces would be exempt.

– End high rents by decreasing market demand (by controlling immigration).

For the full manifesto, visit www.peterwhittle.london.