House building costs highest in London - Centre for London finds

BBC News

02-05-2025

The cost of building homes in London is more than in other parts of England, think tank analysis has found.The Centre for London reported the upfront cost of constructing 88,000 new homes a year, the government's annual target for the capital, is roughly 43 times higher than the equivalent target in the West Midlands.The research was shared at the centre's 2025 housing summit on Wednesday, where Sem Moema, chair of the London Assembly housing committee, said: "If we don't fix the housing crisis, the character of the city will be extinguished."A Mayor of London spokesperson said: "The mayor will continue to work in partnership with the government to deliver more genuinely affordable homes."
'Closing schools'
Separate polling by the think tank, which is politically independent, found 60% of Londoners surveyed had considered moving out of the capital due to housing costs rising over the past 12 months, the Local Democracy Reporting Service (LDRS) said.Ms Moema, a Labour member representing Hackney, Islington and Waltham Forest at City Hall, said: "I see in my own constituency the hollowing out that occurs and continues to occur, when the failure to fix the housing crisis for a decade and a half changes the character of our city, and not for the better."In all three boroughs, we're being forced to consider closing schools, because there are basically no children left in northeast London. "Families can no longer afford to own or even rent properties in my boroughs."Centre for London's research found the crisis is being exacerbated by the upfront cost to developers being at least £2.2bn, if they built enough homes to hit the government's target in the capital.The estimate was produced by combining the costs associated with the Building Safety Levy, Section 106 agreements, the Community Infrastructure Levy and planning fees for local councils, according to the analysis. The figure in the West Midlands metropolitan county – which includes Birmingham – was only £50.6m, and only slightly higher in Greater Manchester at £61.3m. In the London borough of Wandsworth alone, which had the highest cost of any London council area, according to the LDRS, the estimate was £253.9m.
'Invest in capital'
Ms Moema said: "We have a generation who will never get on to the property ladder independently."We need to confront this reality. As with climate change, the costs of not doing anything will be greater than the costs of further investment."A spokesperson for the mayor said: "The mayor is working hard to turn things around, building on a strong track record of delivering tens of thousands of genuinely affordable homes across the capital and more new council homes than any time since the 1970s."
'Ambitious solutions'
Commenting on the Labour government's approach to tackling the housing crisis, Centre for London CEO Antonia Jennings said: "We've seen increased investment in the Affordable Homes Programme, planning reform which allow building on low-quality sections of the green belt and the new Renters Reform Bill. "But, these are only the very first steps."She added: "We urgently need ambitious solutions that respond to the scale of the challenges facing the capital. "The government must get behind London's leaders and invest in the capital to finally turn the corner on the housing crisis."
The Ministry of Housing, Communities and Local Government (MHCLG) has said meeting the housing challenge in London is a "crucial part" of its national mission to build 1.5m homes and kickstart economic growth.The government added that it had made "£200m available through the Brownfield Infrastructure and Land fund to strategic sites across the capital".Another £81m from the Housing Infrastructure Fund is also being given to Transport for London (TfL) to make improvements to Surrey Quays Station and "unlock more than 8,000 new homes in Southwark and Lewisham".