Research into the depth of London’s housing crisis has prompted calls for a comprehensive strategy to tackle it.
An interim report from the London Housing Commission published by think tank the Institute for Public Policy Research (IPPR) found an average property in the capital cost 10 times the average salary.
Other bleak figures from the study included a 12% drop in the number of households that own their own homes with a mortgage to 27% of the population while rents rose 16% over five years in comparison to a 2% increase in wages over the same period.
In summary people’s ability to buy a property has been diminishing while the cost of renting before making a purchase soars.
To alleviate the problem the report suggests 500,000 houses need to be built in London over the next decade. The city only managed 194,000 over the past 10 years.
London Housing Commission chair Lord Bob Kerslake said: “Make no mistake, the capital is in the midst of a housing crisis but it’s of a different order to any London has experienced in the past.
“Decent housing and the idea of home ownership is becoming more and more out of reach of ordinary Londoners.
“As the commission heard in the many responses to our recent call for evidence, businesses are being detrimentally affected as current and potential employees are priced out of taking work in the capital, public services are struggling to recruit and low-income households are being forced out of the city by rising rents and frozen entitlements.
“In short, the social and economic fabric of London is being damaged by its dysfunctional housing market.
“These issues are not insurmountable, they can be fixed. But there is no silver bullet, no single initiative, that will do it.
“There needs to be a comprehensive strategy for addressing London’s housing crisis – and the Mayor cannot do it alone.
"The governance at present doesn’t match the scale of change happening in London.
“Along with the Mayor, boroughs and industry doing all they can, the Government needs to let London find the right solution for itself.”
The commission’s report recommends all authorities do their best to identify and release more land for the next London Plan, strengthen planning capacity and efficiency and increase building on large, stalled sites.
It also identifies the need to provide stable and long-term investment for affordable housing, improve housing quality in the private rented sector and lengthen tenancies in order to stabilise rents.
IPPR senior research fellow Bill Davies said: “London’s housing problems are deep, but are not beyond repair. Other cities in the world are more densely populated, more affordable and better able to deliver more homes.
“If they are serious about solving the crisis, the next Mayor of London and the Government will need to develop a comprehensive strategy to confront the challenges head-on.
“Left alone, the market will not deliver the homes the capital needs, and the capital and the UK will be worse off as a result.”