The Mayor of London’s City Hall developer should prioritise unlocking new sites for housing by bringing together land from across the city that will attract additional private sector investment. That’s according to the latest report from BusinessLDN, the capital’s leading campaign group, and PwC’s Real Estate team which specialises in housing and other regeneration projects.

Sadiq Khan committed to launching a Greater London Authority (GLA) developer in April 2021, with the aim of “build[ing] more of the low-cost housing that’s desperately needed.” Following this in 2022, Lord Kerslake was commissioned to do an independent review of the GLA’s record on housing delivery within which he also recommended how the vehicle should be established.

The analysis, which follows in-depth consultation with developers, investors and housing associations, comes as GLA data highlights the need for a significant boost in supply to hit residential completion targets.

John Dickie, Chief Executive of BusinessLDN, said: “London needs to build more homes but tough market conditions in recent years have led to housebuilding in the capital grinding to a halt. High housing costs are hitting the capital’s competitiveness by making it harder to recruit and retain staff as well as exacerbating broader social challenges.

“This new City Hall developer can play a vital part in boosting delivery of new homes, particularly affordable housing, by opening up sites that the private sector is unable to take forward alone and attracting much-needed additional investment. It needs to go hand-in-hand with other measures from the new Government and Mayor, such as planning reform, to increase supply so more Londoners can afford to live and work in the city.”

James Bailey, UK Housing Leader at PwC, said: “Increasing the supply of good quality, safe and affordable homes is integral to the ongoing success of London as a global and inclusive city. The challenging macroeconomic environment in recent years has exacerbated this need.

“Against that backdrop, City Hall developer has the potential to offer a compelling opportunity for GLA to collaborate with partners across the public and private sectors – including other developers and investors – to unlock land and accelerate the delivery of much-needed housing.”

The report proposes the City Hall developer primarily focus on working with public sector landowners to unlock sites for housing development through a land assembly and promotion model. That would encompass:

Working with the wider public sector to identify surplus public land across London which can be acquired or jointly promoted to be brought forward for future development.
Assessing the long-term feasibility of sites and taking them through the statutory planning process before considering releasing them to private delivery partners, while retaining the flexibility to take on a more direct delivery role if required.
In acquiring land, the City Hall developer should complement private sector activity, with clear criteria to avoid it competing with existing housebuilders or housing associations.
Alongside a primary objective to unlock additional investment, BusinessLDN and PwC also recommend the City Hall developer should maximise delivery of affordable housing wherever possible; generate a financial return that is effectively reinvested to reduce the need for additional capital investment; and support diversification of the housebuilding industry, including though harnessing modern methods of construction, leading on decarbonisation and helping small and medium-sized firms to grow.

By taking this approach, the study concludes that, with an initial investment of £100m, the City Hall developer could enable delivery of 1,600 additional new homes over a 10-year period, but with the expectation of using this initial investment to leverage additional private capital to create a bigger impact.

BusinessLDN’s recent Manifesto for the next Government and separate Manifesto for the next Mayor set out a bold package of measures to boost housebuilding and help tackle London’s housing crisis.

These include: providing greater flexibility over how public funding for affordable housing can be spent, giving greater policy certainty including over future social rent increases, urgently reviewing London’s green belt to boost sustainable high-quality development, and – when the public finances allow – increasing public funding for affordable housing to unlock additional private investment. Finding ways around log-jammed systems such as the delivery of affordable homes through Section 106 agreements is also vital to get spades in the ground.