For most Londoners, the impact of the housing affordability crisis is unavoidable. A blend of soaring private rents and unattainable deposits threatens to stifle London’s ability to remain a competitive global city to live and work in. According to the latest census, over the 10 years to 2021, there are 9.8 per cent more households with three or more people in them suggesting more Londoners are living in overcrowded accommodation that they cannot afford. With London’s population set to hit 9.4 million by 2030, could accelerating the disposal of public sector land be the key to solving the housing crisis?

Delivery of new homes has stagnated at around 40,000 homes per year, falling significantly short of the Mayor’s target of 52,000. According to Molior, the number of private new homes starting construction is down 30 per cent since 2017. This is within the context of increasing pressures on build costs, higher affordable housing requirements and more stringent regulation, all of which put pressure on the viability of schemes in the capital. Consequently, developers are only likely to start on sites where viability is less of a challenge. This creates the supply and demand imbalance shown in the chart below, with the greatest shortfall at the lower price points.

How much public sector land is there, and who owns it?

Our analysis of public sector assets, which included land belonging to the Greater London Authority (GLA), Transport for London (TfL) and other central government departments acknowledged in the table below has identified around 3,800 hectares of land across London. We estimate that around 2,500 hectares is within a 1km radius (10-minute walk) of a Tube station and nearly two thirds (62 per cent) of the land is located in areas where second-hand values are below £700 per sq ft, mostly concentrated in East London.

Unlocking land in lower value areas is key, as shown in the chart above, demand is greatest for properties that are sub £700 per sq ft. Some of these sites have been allocated in local plans and have a disposal plan in place, but progress is slow and there are still many sites with no activity. In our next blog we will take a closer look at planning activity and where the most viable opportunities might be.

Approximate breakdown of public land owners:

While these figures do include both operational and GLA land (the majority of which is already under development agreement), as well as land unsuitable for development, it suggests there is significant potential for publicly owned land to be sold or redeveloped for residential use.

However, the true scale of the opportunity is hard to estimate given the condition of publicly available data. Although the GLA does update a map of publicly owned land, the database doesn’t include land owned by the NHS or local boroughs. Additionally, the database only identifies ownership, and doesn’t provide an assessment of whether the land is being considered for a disposal process, or how it is currently being occupied, making it very challenging to identify potential opportunities.

Current databases also fail to account for land that is in use but under-utilised, such as single-storey retail blocks or low-rise housing. Given London’s development land is in such short supply, providing high density new homes in well-located areas will rely on unlocking large sites in single ownership.
    
Alongside the GLA, TfL is one the largest land owners in London. Rather than selling its assets, TfL has set up a property arm which manages over 2,220 hectares of land, 1.5 per cent of the area of London. In 2021, TfL published revised plans that could see 60 hectares developed over 50 sites to deliver 13,000 homes and a further 110 hectares of developed land has been identified which can deliver 33,000 homes. Whilst this sounds abundant, many of these sites are highly complex and financially challenging.

Therefore, collaboration, transparency, innovation and accountability on all fronts will be required to seize the opportunity that London offers. It is clear that a combination of both the private and public sector is necessary to deliver the homes that London requires, as our next blog will discuss.

Further information

Contact Katy Warrick or Sophie Rosier

Savills Planning

Unlocking development in the capital: how many homes could be built on London’s publicly-owned land?

The benefits of public & private partnerships in bringing forward housing delivery across London