We’ve released our latest research into the race to become London’s next mayor and what each result will mean for the average UK homeowner.
At the start of May, the fifth election for the capital’s next mayor will take place. The incumbent Boris Johnson choosing not to run, leaving Labour candidate Sadiq Khan and Conservative representative Zac Goldsmith to battle it out as the two front runners.
- To build 50,000 new homes by 2020.
- Give Londoners that have lived and worked in the capital for more than three years first chance to buy new properties built on TFL owned land.
- Introduce Homes for London scheme, working with city hall, local councils and developers on the best route to addressing the housing shortage.
- Help existing London homeowners by improving energy efficiency, helping with service charges and the renewal of existing leases.
London Property Supply
The severe difficulty in getting a foot on the London ladder is primarily due to the overwhelming level of demand for London property and the insufficient level of supply to match.
Analysis of ‘Number and Density of Dwellings by Borough since 2001’ shows that historically, a Labour mayor has presided over an almost continuously increasing level of property construction in the capital.
In fact, between 2001 and 2008 under a Labour mayor there was an increase in housing stock of 186,000 dwellings.
However, under a Conservative mayor between 2008 and 2014, the level of housing stock fell significantly, with just 152,000 new dwellings being built.
With London house prices continuing to spiral further beyond the reach of aspirational home-owners, a reduction in demand levels via an increasing level of supply will at least go some way in cooling the London bubble and benefiting those trying to buy.
Where those already on the London ladder are concerned, the value of their property and its increase or decrease will be their primary concern.
There were four occasions from 2002-2005 during Ken Livingstone’s eight years as Labour mayor, where house prices in London increased at a lower rate than the UK as a whole. Up until 2008 when Boris was elected, London property values increased by 89%. But despite London’s tendency to be the driving factor in the UK property market, the national average value increased by 113% during the same period, 24% more than the capital.
However, under the Conservatives, there were six years in which London outperformed the rest of the UK, even though Boris oversaw the majority of the property market crash between 2007 and 2010. Despite this, property values under the Conservatives in the capital have increased by 41% between 2008 and 2015 compared to just 30% nationally, with values elsewhere across the UK failing to reach previous levels.
So under Ken Livingstone’s tenure as the Mayor of London house prices increased at a quicker rate, but failed to outperform the national average, whereas the Conservatives oversaw a smaller rate of increase but the London market, for the large part, performed better than the rest of the UK where price is concerned.
It’s always hard to pick a side when we the UK public, are subjected to the onslaught of smoke and mirrors deployed on the run up to an election. We’ve seen the monumental failure of the Help to Buy scheme over recent years, which was supposed to be the answer to our first-time buyer woes, so it’s always hard to decide which candidate to trust.
However, historic data doesn’t lie and so this research shows it’s pretty clear cut on who to vote for, depending on whether you’re an aspiring or existing London homeowner.
Yes, Boris and the Conservatives have generally seen London property values increase at a higher rate than the UK, but one might argue that having inherited a pretty raw deal in 2008 after the market crashed, the only way for things to go were up. As the capital and crown in the UK market, London was always going to see a healthier rate of growth than the rest of the UK as the market found its feet again.
But on the face of it, if you do own a London property, a Conservative mayor is going to be better for you in terms of your property price, so a vote for Goldsmith is probably the way to go.
However, the capital is in the tight clutches of a housing deficit at present. I’ve highlighted time and time again that the lack of London supply is fuelling a dangerously artificial bubble in the capital. It’s only a matter of time before it pops again. Therefore, Labour’s superior record where building is concerned will not only help stabilise the market but will also help cool prices and give aspirational homeowners in the capital a better chance of getting on the first rung.Russell Quirk