London has land. Public bodies—including Transport for London, the NHS and local councils—own thousands of hectares of underused land across the city. Much is close to good transport links too. According to the New Economics Foundation, this could deliver up to 200,000 homes if properly mobilised … writes Sanjay Shabi
London is one of the world’s most vibrant cities—bustling with opportunity, culture and energy. Yet for many of its residents, there’s one dream that keeps drifting further out of reach: a home of their own.
Whether you’re a first-time buyer being outbid by cash investors or a renter watching your monthly costs swallow half your income, you’re not alone.
Why is this Happening?
There are three main culprits:
- Not Enough Homes
London needs at least 66,000 new homes each year to keep up with demand, but only about 37,000 are being built. That’s a shortfall of nearly half! The planning system is slow and often bogged down by red tape, local opposition like NIMBY-ism too. - Skyrocketing Land Prices
A major chunk of development costs comes from land itself. In London, land value accounts for over 70% of the cost of new housing. This drives up prices before a single brick is laid. - Homes as Investment, Not Shelter
Nearly 1 in 10 homes in Central London are owned by overseas investors or sit vacant for long periods. These “buy-to-leave” properties artificially reduce supply and drive up prices.
The issue is more nuanced than just building “more.” The real crisis lies in who those homes are built for, where they’re built, and how they’re distributed.
Five Magic Steps : How Do We Fix It?
1. Unlock Land and Build—But Smarter
London has land. Public bodies—including Transport for London, the NHS and local councils—own thousands of hectares of underused land across the city. Much is close to good transport links too. According to the New Economics Foundation, this could deliver up to 200,000 homes if properly mobilised. To overcome inherent challenges faced by the plague of complex planning systems and political hesitation, here are three easier to activate solutions:
- Create a London Public Land Register so citizens and councils can track and unlock idle land.
- Streamline regulations for converting unused commercial properties and prioritise development of brownfield sites with collaborative, community input to achieve a win-win for all.
- Introduce a “use it or lose it” tax on developers who sit on land with planning permission.
2. Make “Affordable Housing” Actually Affordable
Let’s be honest. The term “affordable housing” in London has become meaningless. Londoners are paying an average of 46% of their income on rent, So, it’s time to recalibrate with these three suggested methods:
- Redefine affordability based on local median incomes, not arbitrary percentages. Even introduce rent caps tied to inflation or wage growth.
- Mandate that at least 50% of new developments include truly affordable options. A recent report by the Greater London Authority (GLA) found that homes priced at 30–40% of local income levels are the only ones truly affordable for most Londoners.
- Expand community land trusts and co-operative housing models to give locals control over land and prices especially for lower paid and junior key workers.
3. Support Small Developers and Self-Builders
Right now, large developers dominate the market—but they also control land supply, often slowing builds to keep prices high. Meanwhile, small developers build just 12% of new homes—down from 40% in the 1980s. Ways through include:
- Streamlining planning for smaller scale developments, say under 5-10 homes.
- Set up public lending banks to finance community or small-builder projects with the option of preferential interest terms.
- Allow boroughs to fast-track planning for small, sustainable builds on infill or back-land plots.
4. Legalise “Gentle Density” in Suburban Zones
Here’s a fun fact. If every street in Zones 2–4 added just two homes, we’d solve London’s housing shortage tomorrow.
London has vast swathes of land locked into low-density, single-family housing. Adding modest height or converting homes into flats—what planners call “gentle density”—could provide 100,000+ new homes without high-rises or gentrification. Here’s a trio of possible approaches:
- Legalise mid-rise homes, mansion blocks, and terraces in suburban zones.
- Introduce pre-approved design codes for conversions and extensions to speed up planning.
- Offer tax incentives for homeowners who convert underused space into liveable units.
5. Tax Vacant and Overseas-Owned Properties
Finally, the UK already charges an extra 2% stamp duty on overseas buyers, but it’s not enough. Local councils should have powers to:
- Charge higher council tax on vacant properties
- Incentivise selling or renting long-term vacant homes
- Limit bulk-buying by investors in new developments
Such schemes can work. Vancouver implemented a 3% “Empty Homes Tax” in 2018. Within two years, the number of empty homes fell by 25%.
The truth is, the housing crisis is a policy choice if not policy failure. London is rich in land, money and talent. What we lack is the political will to disrupt the status quo.
Are you affected by the housing crisis? Got ideas or experiences to share? Email us at info@ldd.news
