London’s housing dream has collapsed: the capital can’t build, can’t buy, and can’t go on like this, writes Lord Bailey

To put it simply, we can no longer build homes. The number of private housing starts fell by 73% this year. The dream of home ownership has never been further away.

The meltdown within London’s housebuilding industry has widespread consequences for us all. Private rents are at their highest ever level.

The average room – not a flat, not even a studio, but a single bedroom in a shared house – now costs over £1,000 a month. A thousand pounds. For one room.

Londoners renting privately are trapped in a doom loop from which there is little hope. Despite working hard to earn a salary potentially well above the national average, saving a 10% deposit is an impossibility when you are spending over half of your monthly income on rent, and at a time when taxes for the average graduate are the highest they have ever been.

These Londoners subsidise the housing of others, yet they will never qualify for affordable or social housing themselves. But they will also never be able to buy a house. The inherent unfairness within this system is becoming increasingly unfeasible.

We must have a viable route to home ownership for those who are working hard, earning a good salary and doing everything the system tells them to. Otherwise, the system will simply collapse because there is no incentive to work and prosper in life.

If you are a homeowner and you are looking to move, less new buyers coming into the market means you will find it harder to find a buyer, and so the market stagnates.

Londoners on lower salaries have been priced out from the private rental market, with disastrous consequences for social housing costs. A staggering 52% of all those living within London are now in a form of subsidised housing, while councils are spending hundreds of millions of pounds on temporary accommodation.

Our ambition should be a realistic route for reducing the cost of social housing to the state, not sleepwalking into a system where an ever-growing majority of people rely on housing funded by the taxpayer.

We must have routes for affordable housing that promote the value of work and promote the ambition of moving into a form of home ownership in the long-term.

There is an ever-growing group who, in decades gone by, would have rented privately for a short period and then bought their own home in their twenties or thirties. They would have gradually moved up the property ladder, and by early retirement, would probably be mortgage-free with some savings tucked away.

An entire cohort of people, however, have not bought. They're still renting privately now, with little in the way of savings, no deposit for a mortgage, and no prospect whatsoever of getting on the housing ladder.

So, what happens next? In years to come, you'll start to see people who have rented their entire lives still needing to rent into their fifties, sixties, and beyond. When those lifelong renters reach retirement or a point at which they can physically no longer work, many won't be able to afford to rent privately anymore. They'll need social housing and will instead be added to that already enormous waiting list.

Meanwhile, those who have been living in social housing or are already on the waiting list will still be there, because the transition from social housing to home ownership has become such an impossible gap to bridge.

We'll also find ourselves with communities that are less close-knit and less socially coherent. The fabric of what has held neighbourhoods together is fraying.

We have got to act, and so that is why I have written my new report Get London Building, which puts forward the radical solutions we need to tackle London's housebuilding crisis. Every Londoner loses from the situation we find ourselves in at present.

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Lord Bailey AM is the City Hall Conservatives' housing spokesperson

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