G15: London faces housing system ‘breaking point’ without urgent action

Without more affordable housing, these essential workers risk being forced out of the capital, as private rents in London can take over 94 per cent of take-home income for those in the lowest income brackets, the group said.

In addition, research from the G15 in June found that providing homes for everyone on London’s waiting list would inject at least £7.7bn into the UK economy each year.

The G15 has urged the government to use the Spending Review to restore financial certainty to the sector and get social homebuilding back on track.

To do so, the group said the government should introduce a 10-year rent settlement at Consumer Price Index plus one per cent and create a long-term successor to the Affordable Homes Programme.

It said that the government must also ensure equal access to the Building Safety Fund and launch a new Warm and Decent Homes Fund to restore the sector’s financial capacity.

Research from the G15 has found that a 10-year rent settlement and a return to rent convergence could generate up to £923.5m in extra income for its members.

The G15 highlighted figures that showed the group’s development slowdown to back up its case for its Spending Review submissions.

These figures were first released in February last year in an open letter from L&Q to the housing secretary at the time, Michael Gove. They showed that the G15’s combined development pipeline more than halved from 14,658 homes in 2022-23 to just 6,387 in 2023-24.

The group added that only 796 homes were started in the first quarter of the current financial year, a 34 per cent annual drop, while home completions are expected to fall by 6.2 per cent in 2024-25.

Fiona Fletcher-Smith, chair of the G15 and chief executive of L&Q, said: “Although this crisis began before the new government took office, the responsibility to fix it now lies with them.

“A lack of social and affordable homes will directly affect every Londoner, not just those on waiting lists.

“With the right policies and funding from the Spending Review, we can reverse the slowdown, help the government meet its 1.5 million homes target, and provide the room to grow that London and Londoners so desperately need.

“Either government grips the housing crisis or accepts that it is managing decline. Housing associations have the experience, scale and public service ethos to deliver the right homes, for the right people and in the right places. The time to act is now.”