There is a lack of affordable housing in London for those on lower incomes
and it is damaging both public and private sector organisations. Only by
working together will the problem begin to be dealt with, writes Neale Coleman
The pressures of London’s world-class economy are exacerbating a serious
shortage of housing, creating a supply side threat to the capital’s competitive
While most focus has been on the lack of affordable housing for households
at risk, such as the homeless and single parent families, there is an emerging
consensus that there is a key worker housing crisis.
The problem is wider than failing to meet housing priority needs – the
housing shortage is affecting London’s workforce and the public sector’s
ability to deliver essential services. It is no longer just a housing issue but
an economic one.
To address the problem, the Government is prioritising programmes for
certain public sector employees.
The Government’s Starter Home Initiative has named nurses, teachers and
police as those central to delivering the Government’s reforms on improving the
health service, education and tackling crime.
Key worker housing, however, affects employers on low to moderate incomes
across the board, not just those in the public sector.
London’s role as a world city is based on its excellence in business and
finance, education, culture and the arts. Its tourist industry directly employs
275,000 people and contributes £9m to the economy. London’s public services are
as dependent on porters and cleaners for their service delivery as they are on
teachers and nurses.
The Mayor’s Housing Commission report, Homes for a World City, saw the
problem as a lack of intermediate housing, that is housing for people who
cannot afford market housing but earn too much to qualify for social rented
Traditionally public sector employers have provided intermediate housing,
such as police section houses and cluster flats for nursing, to help house new
recruits. Increasingly employers are finding retention is as great a problem as
recruitment and that shared accommodation is not the solution to staff
retention problems. London’s employees have the same housing aspirations as the
rest of the population – to own their own home in a safe and accessible
This has housing implications for the provision of intermediate housing.
There needs to be more housing for rent for new recruits. But there also needs
to be more starter homes and family housing for sale. Shared equity housing has
the most potential, but it must be made to stack up, requiring more public
The Mayor’s response to the intermediate housing issue has been threefold:
provide more intermediate housing, sponsor research into housing demand and
promote new partnerships to deliver more housing.
Planning policies in the London Plan will seek to increase the supply of
housing and the proportion of affordable housing. Intermediate housing is seen
as part of the continuum of affordable housing provision.
Already research for the GLA shows encouraging signs that housing capacity
estimates are being met and exceeded.
The London development pipeline is also very buoyant. Recent research for
the GLA and the House Builders’ Federation has found that affordable housing
policies have not been a brake on housing development.
The GLA is sponsoring research into intermediate housing needs and
aspirations, and the mismatch between need and supply. The Mayor has supported
the Single Regeneration Budget project, Keep London Working, which is providing
research into promoting new intermediate housing projects.
The Mayor’s London Development Agency has also funded the development of a
prototype key-worker ‘mini-suite’ – a housing module designed to provide
accommodation for key workers to rent for as little as £65 per week, affordable
to people on a salary of £14,000 per year.
Finally, the Mayor is using his strategic role to promote pan-London and
sub-regional partnerships, such as the Housing Forum for London and the Thames
It is increasingly clear that more can be achieved through working in
partnership – this problem is too great to be dealt with in isolation.
By Neale Coleman, housing adviser to the Mayor of London