Development Finance News:- A string of 15 new millennial towns on London’s fringes need to be built within the next decade, urges a centre-right think tank.

Policy Exchange’s report Tomorrow’s Places is calling for a strategy on a scale similar to that after the Second World War to rebuild London, which led to new towns such as Milton Keynes.

Hank Zarihs Associates | New Millennial Towns on London's Outskirts Needed for Younger Workers

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It’s proposing new towns, initially of 30,000 homes, to be built in areas already identified for growth. These include the Thames Gateway, the London-Stansted-Cambridge development corridor, the Western Wedge towards the Thames Valley and the Wandle Valley towards Gatwick Airport.

“This new programme would be a strategic approach to managing London’s expansion, rather than the intensification that sometimes threatens the character of the capital and the surrounding green spaces,” say the report authors Richard Blakeway, ex-deputy mayor for housing under Boris Johnson, and Jack Airey.

They argue this would be a more effective way of sorting out the capital’s housing shortages than the government’s planned 24 garden communities. The report is critical of these proposed schemes claiming many don’t have legal backing making it difficult for them to gain planning permission.

The authors say expecting large brownfield sites to account for 62 per cent of the land where new homes are to be built is unrealistic as there are not so many of these type of sites. They recommend an extra 50 per cent of contingency land earmarked for new housing as typically only one in two planning applications are approved.  The report points out that only five local authorities out of 25 on the edge of London have development plans compliant with national planning policy. The authors attribute this to the difficulties of finding land which is not protected in some way.

Current New Home Building Targets are not Enough

Tomorrow’s Places states that London mayor, Sadiq Khan’s target of 65,900 new homes a year over the next two decades is insufficient. It adds that the London School of Economics has said the target “almost certainly underestimates housing need” in London.

Housing, Communities and Local Government minister, James Brokenshire MP has criticised the mayor’s target. In a letter to Sadiq Khan he said: “I am not convinced your assessment of need reflects the full extent of housing need in London to tackle affordability problems.” Civil servants believe the target should be 100,000 new homes a year, although neither the mayor nor the government have identified the land for the new homes.

Greater London Assembly research shows between 1997 and 2017 jobs increased by 42 per cent and the number of people by 26 per cent, but the volume of homes rose by only 16 per cent. The Office of National Statistics projects the number of households in and around London will increase by 950,000 – 20 per cent over the next two decades.

Government planning inspectors are currently examining London’s new draft plan prior to approval by the secretary of state.

“During this process there is an opportunity to look again at the questions issued in this report – namely the structural flaws that impede housing delivery at the scale and pace it is needed in London and places around the capital,” say the authors.

Development finance providers are likely to welcome any possible future changes in the plan which make it easier to build on more types of site.

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Shiraz Khan is the author of the content. Shiraz is the managing director and founder of Hank Zarihs Associates. With over 16 years' of experience we are master brokers within the short term financing industry. We specialise in a wide variety of short term loans.