London Mayor Khan: House Price Drop Could Boost Economy

Mayor Sadiq Khan has stated that a 1% decrease in London’s house prices could generate a £7.3 billion economic uplift over a ten-year period. Speaking at the Centre for London’s yearly conference, Mr. Khan mentioned that a recent report detailed the “significant impact” that enhanced housing affordability could exert on London’s productivity and the government’s objectives for growth. This new study was commissioned by City Hall, London Councils, Trust for London, and the G15, an association of housing groups. It concluded that declining housing affordability “has had a significant negative effect on London’s economic productivity”. The London mayor stated that the scarcity of affordable housing “is having a profound and devastating effect in every corner of our capital, impacting every part of our progress”. He further remarked: “It’s creating intergenerational inequality like we’ve never seen before. It’s shattering one of the bedrock principles Britain was built on: that if you work hard, you get ahead. And it’s having far-reaching implications for the demographics of our country and our capital.” The mayor contended that an increase in affordable housing within London would facilitate businesses in attracting and retaining employees, diminish homelessness, and lessen dependence on temporary lodging, consequently fostering more employment opportunities and greater investment for future expansion. Earlier this year, during the general election campaign, Khan advocated for a £2.2 billion “emergency stimulus” package aimed at accelerating home construction. The chancellor allocated £100 million in funding for London’s Affordable Homes Programme in the Budget presented last month. The new government requested Khan in July to more than double the annual construction rate of new homes in the capital. A new objective of 80,000 homes has been assigned to him; approximately 35,000 homes were constructed last year. However, the Conservatives assert that this new figure falls short of London’s requirements and is lower than the annual home-building target they had previously established for the mayor in the capital. During his address at the Centre for London, Khan stated: “In short, investment in building homes people can afford will lead to the growth we need.” He continued: “That’s why, as well as doing everything I can from City Hall, I’ll continue to make the case for the national investment we need – for the benefit of London and the whole country.” He concluded: “If there was ever a time for more public investment in housing, then it’s now. And if there was ever a place to show how government still has the capacity to improve the condition of people’s lives, then it’s housing.” Listeners can access the best of BBC Radio London on Sounds and engage with BBC London on Facebook, X, and Instagram. Story ideas can be submitted to hello.bbclondon@bbc.co.uk. This content is copyrighted by BBC in 2024, with all rights reserved. The BBC disclaims responsibility for the material found on external websites. Information regarding its external linking policy is available.