What would the London Mayor candidates mean for the property market?

The London Mayoral elections take place on Thursday 5th May and the city’s housing has been top of the campaigning list for months.

House prices in 28 of 33 London boroughs are now at least 10 times average salaries, with prices in London’s most expensive borough, Kensington and Chelsea, now 38 times earnings, according to research by the property crowdfunding platform Property Partner. When Ken Livingstone was elected London Mayor in 2000, average property prices in London were 5.6 times earnings – now they’re 11 times, as the gap between average house prices and earnings stretched by 33 per cent since Boris Johnson was elected in 2008.

As well as voters, though, agents, developers and investors will also be paying attention. Labour candidate Sadiq Khan’s policy of affordable housing making up 50 per cent of all new developments, for example, has been slammed by the Federation of Master Builders, as the city’s lack of supply is a key underlying factor for the market’s performance in the future.

Brian Berry, Chief Executive of the FMB, says: “Khan’s 50 per cent affordable housing target is entirely unworkable – as has been observed by others that, 50 per cent of nothing is nothing, and this is a particularly pertinent issue for small developers. We urge the Labour candidate to introduce a small site exemption, similar to that which Central Government is bringing forward in its Housing and Planning Bill. This recognises that placing unrealistic affordable housing demands on small sites will leave thousands of projects across the city unviable and hugely increase the barriers to growth of smaller developers.”

Five hundred senior housing figures attended the National Housing Federation’s 100,000 Affordable Homes for London campaign hustings last week, with candidates from the five main parties highlighting the importance of housing to the election and expressing their desire to work with housing associations to end the city’s housing crisis.

In attendance were the candidates for the Liberal Democrats, UKIP and the Green Party. Labour’s Sadiq Khan MP and Conservative’s Zac Goldsmith MP shunned the hustings, but were represented by James Murray and Stephen Hammond MP, respectively.

Hammond highlighted Zac Goldsmith’s passion for working with housing associations to unlock public land and regenerate estates. UKIP’s Peter Whittle spoke of the “feeling of optimism about what we could achieve together”. The Green Party’s Sian Berry highlighted her intention to work with a diversity of housing associations and community land trusts to build truly affordable housing. Murray promised to put housing associations’ commitment to 100,000 new affordable homes at the “very core of the consensus we’re building about what London needs”.

The shortage of skilled construction workers was another theme on the night and in response to a question of how she would do things differently to the previous two mayors, the Liberal Democrats’ Caroline Pidgeon said “I’d set up my own building company at City Hall to drive affordable housing building, and I’d set up a construction academy to get skills into the industry as there is a skills shortage”.

National Housing Federation Chief Executive David Orr comments: “This election has been called a referendum on housing, and it’s fair to say that housing has decisively proved itself the most important substantive issue in the campaign. London will lose its vital diversity without truly affordable housing for all.”