New Shelter research shows developer profits soar while housing system fails families
Housebuilders have failed to build more than 100,000 homes in London in the past five years even after being given the green light, according to new research out today.
Figures from housing charity Shelter reveal that this equates to more than half of all homes granted residential planning permission in the capital in the last five years.
If these ‘Phantom Homes’ had been built, London would have met the Mayor of London’s annual housebuilding target.
In the same time period, the profits of the country’s top five housebuilders have soared by an astronomical 388% to a total of £3.3bn in 2016, according to the research.
Developer profit margins also increased over this time, along with payouts to their shareholders which rose to nearly £1 billion a year.
Shelter is warning that the country’s current housebuilding system encourages developers to sit on land and drip out new homes so as to keep prices high. The housing charity is calling on the government to get tough on developers by giving councils the power to tax those who aren’t building fast enough, as well as taking action on policies outlined in the housing White Paper like granting planning permission to developers based on their track record.
Anne Baxendale, head of communications, policy and campaigns at Shelter, said: “Housebuilders in London are trickling out a handful of poor quality homes at a snail’s pace meaning there are simply not enough affordable homes and ordinary working families are bearing the brunt.
“While people struggle with eye-wateringly high housing costs, developers’ profits are soaring into the billions. Time and again we hear the ‘red tape’ of the planning system being blamed but the real problem is a system where developers make more profit sitting on land than they would by building homes.
“It’s clear our housebuilding system has failed London and the nation, but the government can turn things around by supporting a whole new approach. Shelter’s New Civic Housebuilding model listens to the needs of communities and gives more powers to councils to get developers building the high-quality genuinely affordable homes we need.”