Homes fit for Londoners: London’s homes today


This is the first of two reports in our programme Homes fit for Londoners. In this report we describe London’s housing market today and review the policy tools that might be used to change things so that more Londoners can find and afford decent homes.

There are massive issues with housing in London, and these are affecting almost everyone in the city. Homes are very expensive to rent or buy, causing financial stress for millions of people. Many also face problems with insecure tenure and unsafe homes – this often affects their health. Some people who would like to live here can’t afford to, and this means businesses and the public sector can find it hard to recruit the right people for their jobs.

While there is broad agreement about the scale of the problem, there is much less agreement about what can be done about it. There is no shortage of reports and recommendations about how housing in London could be better, but they often consider certain aspects of the problem in isolation – for example, what would happen if we capped rent increases, or liberalised the planning system, or built on certain areas of land. But we are looking at a complex and difficult system in a large and complex city, so we think it makes sense to try to look at the impacts of different ideas in the round.

London’s homes today

London is home to approximately nine million people – a population that has been growing in recent decades. Today, about half of homes in London (49 per cent) are owner-occupied, 29 per cent are rented in the private sector and 22 per cent are rented in the social housing sector. A significant number of people in London experience issues with their homes such as damp and mould, and these are more common in privately rented homes. London’s housing market varies considerably both between boroughs and within them. For instance, while 11 per cent of homes across London are considered overcrowded, this varies from 5 per cent in Richmond upon Thames to 22 per cent in Newham.

Too many people in London don’t have a secure home, or a home at all. London has more households in temporary accommodation than the rest of England combined, while the number of people sleeping rough in London has increased by nearly 50 per cent in the last decade. One reason for this is the cost of housing in London, which is much higher than across England as a whole, meaning that Londoners spend a bigger proportion of their income on housing. Another reason is that a quarter of all households on the waiting list for social housing across England are in London, with 300,000 people waiting for suitable accommodation in the capital. After taking into account housing costs, a quarter of Londoners (25 per cent) live in relative poverty – well above the average across England (22 per cent).

How public policy influences housing in London

There are a number of ways to respond to this crisis. In this report we summarise how policies at all levels of government have influenced homes in London over the last few decades, and the policy changes that have been recommended by different people and organisations to improve the situation. We cover the following areas:

  • Housing targets
  • The planning system
  • Land availability
  • Finance for social and affordable housing
  • Finance for private house building
  • Developer contributions
  • Regulation of the rental sector
  • Making homes available
  • Personal finance for homes
  • Financial incentives for first time buyers

In our next report as part of this programme, we will set out which tools we believe will be most effective for London, its people and its businesses.