More affordable homes needed in London

More homes need to be built across the City of London, according to new findings.

Research published by Savills showed that there is a severe shortage of properties in the capital with demand outstripping supply.

Its figures showed that in total, London needs at least 50,000 homes to keep up with demand.

Due to the rise in home sales and the popularity of the city, an average of just under 35,000 new homes a year are set to be built over the next five years.

This represents a rise of 28,000 units from a year ago.

But this still falls far short of the homes needed in London, according to the report.

It has predicted that there will still be a shortfall of 15,000 homes a year.

Commenting on the findings, Ingrid Reynolds, director, Savills housing development and regeneration, said: "Local authority and housing association involvement will be essential to delivering the right mix of properties and we expect to see institutional investors boosting their stake in the private rented sector at all levels.

"The trend towards a broader definition of affordable housing to include various degrees of subsidised rent, as well as schemes to support affordable sales, is a reflection of the growing pressure to provide suitable housing to households on a wider range of incomes not just the most vulnerable."

Affordability is another major issue, with Savills forecasting that there will be a shortfall of 6,500 homes for market sale and rent, the bulk of which (5,500) will fall under £375 per square foot. 

At the same time, Savills said that a shortfall of 7,500 units per year is projected in the affordable sector.

The report said that in London, 15,500 new homes a year are needed in the affordable sector in order to meet demand.

Published 27th May, 2014

© 2014 Estates IT Limited