London needs new devolution deal to deliver 50,000 homes, says report

London needs a new devolution deal to deliver the homes the capital needs, a report from the London Housing Commission has concluded.

The next mayor of London and the 33 boroughs should join forces to strike a deal with central government, committing to increase supply to 50,000 homes a year by the end of the decade. In return, the government should give London significant new freedoms to control its own planning, borrowing and taxes.

The mayor and boroughs should form a joint London housing committee, the report advocates, to coordinate housing policy across the capital, and to negotiate this new deal with central government.

The report advocates measures including:

  • Exempting London from the National Planning Policy Framework (NPPF) and instead give the mayor’s London Plan the same status as the NPPF – and giving the mayor the power to force boroughs to change their plans if they are not identifying enough land for housing. This will mean that local authorities outside London have a duty to cooperate with the mayor to help solve London’s housing crisis
  • Allowing the London housing committee to set planning fees for London
  • Allowing both the Greater London Authority and the boroughs to borrow more for housebuilding and infrastructure
  • Devolving stamp duty on the same model as the government’s recent devolution of business rates to local authorities, allowing London to retain a substantial proportion of its stamp duty income, in return for an equivalent reduction in grants from central government, and to adjust stamp duty rates in consultation with the business community, such as via the London Chamber of Commerce and Industry and London First
  • Allowing the boroughs to levy, at their discretion, council tax on developments that fail to meet agreed building targets
  • Allowing boroughs to create their own landlord licensing schemes.

In return, the report proposes the mayor and boroughs should commit to:

  • Doubling the supply of new homes to London to 50,000 per year by 2020, and to maintain this for at least the following five years
  • Ensuring London has sufficient housing at submarket rents
  • Eliminating non-decent housing in the private rented sector by 2025.

Even if central government does not rapidly give London these extra powers, there is much the mayor and boroughs can do right now to address the housing crisis and to prepare the ground for a future devolution deal, says the report.

London Housing Commission chair Lord Bob Kerslake, said, “The London Housing Commission does not claim to have all of the answers, but it is clear that the status quo will not do. The housing crisis will not solve itself, and radical measures of the sort we outline in this report will go a long way to delivering the volume of quality, affordable homes that the capital desperately needs.”

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