Last week, a Centre for London report, presented at the London Housing Summit, argued that the main cause of London’s home ownership crisis is ‘affordability, not shortage’. The BBC lapped it up. 

There is clearly a housing crisis in London, especially in home ownership. But it’s a crisis of supply. Last year, work started on only 5,547 private-sector homes, down 84 per cent in a decade, and on around 4,500 affordable homes. Between 2001 and 2021, the proportion of homes that were owner-occupied fell from 57 per cent to 47 per cent, while the proportion that were privately rented almost doubled to 30 per cent. Greater London’s population has also increased by around 2.7 million. To suggest this has little to do with supply is misguided.

The Centre for London report focuses on house prices rising far faster than wages since 2000, stating that ‘home ownership is 270 per cent more expensive than it was in 2002’. But for first-time buyers, who mainly purchase flats, the gap is smaller. Detached and terraced house prices have tripled to £1 million and £675,000 respectively since 2002, while flats have increased at a lower rate of 140 per cent from £173,000 to £420,000.

One of the report’s claims about supply is........

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