31 March 2016|
As someone who has been in the auction business for over 40 years, I have seen many changes happen in the property market, and much has been said about the current ‘housing crisis’, which has been dubbed by some as the ‘crisis of our day’. Labour’s Mayoral Candidate, Sadiq Khan, who is one of the two front runners alongside the Conservative’s Zac Goldsmith, has gone so far as to say that ‘London’s mayoral elections should be a referendum on the housing crisis’. Both candidates have put property firmly at the top of their mayoral agendas. There can be no doubt that whoever takes the helm at City Hall will need to assert a strong grasp over tackling London’s housing problems. So with just over four months to go, here is my Auctioneer’s mayoral manifesto for the City’s next most powerful man, or woman.
The capital is now home to more than 8.6 million people, a greater number than at any time in its history, and with a population fast on the rise – projected to hit 10 million by 2030 - any future Mayor faces a huge challenge in ensuring the city’s infrastructure keeps pace with the increasing demand. The outgoing Mayor, Boris Johnston, was recently quoted in the Financial Times advising his replacement to “understand the vital connection between transport infrastructure and housing development”. London, he says, will “continue to be the greatest city” in the world, but only if the capital “invests in new transport projects such as Crossrail 2 to link the city centre with new housing projects.”
Crossrail 2, a proposed new north-south link across the Capital, is at the forefront of most Londoners minds. Both Goldsmith and Khan have wholeheartedly committed their support to delivering this project, with Khan fervently putting pressure on Transport for London to reconsider building a station in his home constituency of Tooting after the plan was recently changed to reroute through Balham to reduce costs following the discovery of difficult ground conditions under Tooting Broadway.
As London’s rocketing property prices force more and more people to move out to the regions, Crossrail 2 is, in my view, a necessity to improve connectivity and support future economic growth, whilst alleviating the current over-demand on the transport network. According to City Hall analysts, by 2050, the demand for public transport will have increased by 60 per cent on the Underground and 80 per cent on the national rail network compared to current levels. It will also benefit the property market by supporting the delivery of thousands of new homes across London by allowing new residential suburbs to be created, as well as supporting the economic regeneration of regional towns outside the Capital. In the longer term, it will allow London to keep pace with other global cities like Hong Kong, Singapore and Beijing which are already serviced by high speed transport connections.
Whilst London’s rapidly increasing property prices are a sign of the capital’s success, investment must be made into supplying more affordable housing, otherwise we risk having employees who cannot afford to live anywhere near their place of work, which would be a serious economic inefficiency.
The current Mayor has fallen short of his own target of building 42,000 affordable homes a year and the next Mayor must do more to put pressure on the government to ensure additional land owned by public bodies is freed up for development, and that brownfield land in public and private ownership, that is suitable for development, is made available.
If these challenges are not enough for the new Mayor, a referendum on the EU looks set to occur during his tenure. If Britain did vote to leave the EU in the forthcoming in-out referendum, what might be the consequences for the British housing market? Long term predictions are usually as accurate as gazing into a crystal ball. On the one hand, markets like certainty, so it is likely that, as we approach the referendum, we may see some caution in the property market as buyers and sellers wait to see which way Britain votes. However, a Britain freed from the bonds of EU Legislation could well attract more inward investment and have a positive impact on the property market. Either way, the next Mayor will have a number of challenges to look forward to.
For me for now, it’s back to the business of auctions.