Council Home Construction in London Outpaces the Rest of the Country Combined

Newly published government data suggests that more council home construction projects commenced in London in 2021 than in the rest of the country combined. A total of 5,494 projects broke ground in the capital last year, compared to 4,325 spanning the rest of England as a whole.

Combined, this adds up to the most new council housing projects commenced in any year since 1979, when 9,128 projects broke ground.

Southwark was the London Borough that topped the table in terms of new council housing starts, with 895 new projects having commenced last year.

“There’s no quick fix to London’s housing crisis, but we’re taking significant steps in the right direction by backing a new renaissance in council homebuilding,” commented Mayor of London Sadiq Khan.

“In London today, we’re not just building more council homes; we’re building better homes too. The new generation of council homes are some of the best that have ever been built: modern, sustainable, and fit for the 21st century.”

“These new homes form a key part of building a better London for everyone: one that is greener, fairer, and more prosperous for all.”

“But the headwinds from recent economic chaos, combined with the effects of the pandemic, Brexit, the soaring cost of construction materials, and rising inflation, are hitting housebuilders hard and making housing delivery increasingly challenging.”

“That’s why I am urging ministers to provide additional funding so I can continue to deliver the good-quality and genuinely affordable homes that Londoners desperately need.”

The leader of Southwark Council, Kieron Williams, also praised the efforts being made to provide more affordable housing options in London.

“With the cost of living soaring, now more than ever, we need more council homes in our city,” he said.

“I’m delighted that we were able to start another 895 in Southwark last year, thanks to support from the Mayor, alongside our own council investment.”

“Achieving the most starts in London has been far from easy given the tidal wave of challenges facing the construction industry.”

“What worries me now is that those challenges are only getting harder as the national housing crisis deepens and construction costs spiral.”

“Having such a strong partnership between the mayor and councils is making a real difference, but we urgently need the government to get serious about solving the housing crisis too.”

Living cost crisis

The construction of thousands of new council homes in London may eventually bring some relief to those who continue to find themselves priced out of the market. In the meantime, the growing exodus of younger renters leaving London to find more affordable homes elsewhere is likely to continue.

Between April and March this year, the average rental price for a one-bedroom property in London equalled just over 46% of the average Londoner’s gross median pay. By contrast, renters across the rest of the country use around 26.4% of their gross median pay for rent.

According to Foxtons Estate Agents, one of the main drivers behind skyrocketing rent prices in London is explosive demand, coupled with minimal available inventory. They said that around 23,000 rental properties were listed on the market in September, meaning that an average of 29 people were competing for each property listed.

There are approximately 9% fewer properties available on the private rental market in London than at the same time last year, while demand has increased by as much as 20%.

Consequently, as many as 20% of younger people are planning on leaving London entirely, as they simply cannot afford to keep spending so much of their money on rent costs alone.

Return to normality triggers further affordability issues

Speaking on behalf of Hamptons, head of research Aneisha Beveridge said that the return to the new normal would most likely continue pushing average London rental prices higher.

“With COVID-19 being pushed further to the back of people’s minds, life in the capital is slowly returning to its new normal. Tenants are returning to the bright lights of the city, and this is driving rental growth to record highs,” she said.

“The rise of remote working means that fewer tenants are moving to the capital specifically for work. In fact, a growing number of tenants choosing to live in London are working fully remotely and could live nearly anywhere in the country. The footloose nature of many jobs today means that it will be culture and lifestyle rather than employment that become the capital’s biggest draw.”