George Osborne and Boris Johnson, the Chancellor and the Mayor of London, put their rivalries aside last month to unite behind a blueprint designed to expand London’s population and wealth. The ambitious capital development plan, covering the city’s transport, economy and cultural sector, pitches London head-to-head with New York in a race for growth, setting a £6.4 billion expansion target to hit by 2030.
The six key points of the Long-Term Economic Plan for London1 are:
1. Outpace the financial growth of New York by adding £6.4 billion to the London economy by 2030, which is equivalent to £600 more per person if the city’s productivity grows at the same pace projected for New York.
2. Create over half a million extra jobs in London by 2020 by backing businesses, attracting worldwide investment and continuing to raise education standards.
3. Build over 400,000 new homes to solve London’s housing shortage, which is the city’s number one challenge right now. This will involve establishing a London Land Commission to identify and support development of brownfield and public sector land.
4. Deliver £10 billion of new investment in London’s transport over the forthcoming Parliament, including the expansion of the 24 hour tube service, providing wider Wi-Fi coverage on the London Underground, expanding the Routemaster bus fleet, improving the city’s roads and cycle lanes, and identifying the next key infrastructure investment after Crossrail.
5. Bring London to the centre of the world’s creative and commercial industries, with new investment in science, finance, technology and culture. This initiative will include the preposition of a world-class concert hall for London, led by the Barbican Centre.
6. Give more power to Londoners to control their city’s future, awarding new powers for the Mayor of London to support economic growth, boost skills in the capital and exert more control over planning commands.
What do these plans mean for property owners in the capital?
With 400,000 new homes due to be built in London over the next fifteen years, property ownership opportunities for residential and investment purposes will increase significantly.
So far, nine designated new Housing Zones have been assigned in Greenwich, Bexley, Barking and Dagenham, Wandsworth, Harrow, Hounslow, Lewisham, Southall and Haringey. By summer 2015, a total of 20 Housing Zones are due to be announced.
For council tenants across the country, an £84 million Social Mobility fund is to be launched to help those eligible for the Right to Buy to purchase their own homes on the open market.
Under the Estates Regeneration scheme, funding has been confirmed to improve some of the most run down housing estates in London, with Grahame Park in Barnet, Blackwall Reach and New Union Wharf in Tower Hamlets and Aylesbury Estate in Southwark making the shortlist. These regeneration projects will provide 8,000 homes.
Properties in London and the wider South East will also be better protected from floods owing to a six-year £2.3 billion national flood defence programme, which aims to provide protection for at least 300,000 households nationwide by 2021.
In 2016, construction work at Brent Cross will begin, delivering 7,500 new homes and 27,000 jobs to the site, making Brent Cross a prime catchment area for investors in the years to come.
Changes to London’s public transport systems will also alter buyer behaviour considerably, placing more properties within prime location criteria. One of the most notable transport developments is that the Government have agreed a principal heads of terms agreement for a £55 million loan to support the extension of the London Overground to Barking Riverside, unlocking potential for 11,000 homes along the route, and work is expected to start in 2017.
The Long-Term Economic Plan for London is yet another confidence booster for property investors wanting to buy in a city yielding sustainable scope for growth.
1 GOV.UK, 2015. Long term economic plan for London announced by Chancellor and Mayor of London. [Online] Available at: https://www.gov.uk/government/news/long-term-economic-plan-for-london-announced-by-chancellor-and-mayor-of-london. [Accessed 16th March 2015].