The soaring cost of land in the capital is causing taller buildings to sprout up across the city, the London Assembly has found, as developers find they need to sell more flats to turn a profit.
An investigation by the Assembly’s planning and regeneration committee heard that construction firms are finding they need to build more storeys on their towers than originally envisaged, after taking account of the huge cost of acquiring a site for development.
Stuart Baillie, head of planning at Knight Frank, told the committee: “Sometimes with these developments, the land value itself to acquire the sites and build just simply pushes the height up because the developer needs to get a minimum of 20 or 30 units on that site to make the returns, to make it viable to deliver the development.”
Rising construction costs, caused by factors like the war in Ukraine, and ‘Section 106 agreements’, where developers make a cash contribution to improve local infrastructure - such as transport, healthcare and affordable housing - have also boosted the incentives to build taller tower blocks.
Jules Pipe, Sir Sadiq Khan’s deputy mayor for planning, told assembly members: “If things were more viable than they were, if the land had been cheaper and if we were not so reliant on Section 106 to provide affordable housing, generally buildings would be a lot lower in London.”
Despite this trend, the overall number of buildings being built in London with 20 or more storeys has slowed down over recent years, largely because of factors which are impacting all types of residential development, including low-rise homes.
According to data gathered by New London Architecture, only 18 buildings of 20 or more storeys completed construction in the capital in 2023, compared with 22 in 2022 and 44 in 2019.
Mr Baillie said: “The residential market is incredibly difficult. It is at the worst it has been in 25 years of me working in professional planning in London. The delivery of housing has certainly dropped off significantly recently.
“There is a viability challenge to these residential tall buildings, but there is a viability challenge to any residential development in London.”
New fire safety requirements, which state that all tall buildings must have second staircases, have also forced several schemes to undergo re-designs, causing delays and extra costs.
However, whilst overall construction of residential tall buildings has slowed down, the committee has also noted that “applications for Purpose Built Student Accommodation (PBSA) and co-living is increasing,” as “these formats are seen to work well at scale and as such can more easily attract funding”.
In their new report, the cross-party committee has said the mayor should try to better understand the relationship between land values and tall buildings by conducting an assessment as part of the next London Plan - which is the key document setting out how the capital should develop over the coming years.
Assembly members have also said they are “concerned that fundamentally there is an absence of definitive analysis of what a successful tall building looks like” at City Hall, and they have urged Sir Sadiq to “produce guidance setting housing design standards specifically for tall residential buildings as part of the next London Plan”.
The committee argues that the mayor having a firmer grip of these standards is important, as tall buildings can often be poorly-adapted to the needs of families, older people and disabled residents. Neighbours living close to the tower blocks can also be concerned about sightlines being blocked, glare and overshadowing and the “creation of dangerous wind tunnels”.
The committee’s Tory chairman, Andrew Boff, said: “While this committee holds a range of views on the merits of tall residential buildings, it is united in its view that they must be built to the highest standards to meet Londoners’ housing needs.
“Our investigation has shown that there is a lack of understanding of what a successful tall building is and not enough is being done to measure it.
“The Greater London Authority (GLA) needs to do much more in this space, by creating design standards for tall buildings, gathering more evidence on their suitability and sustainability, and setting out what mixture of building types London needs – not just the overall number of homes required.”
A spokesman for Sir Sadiq said in response to the Assembly’s investigation: “The mayor believes that tall buildings have a role to play in London, when well designed and built in the right places, given the scarcity of land available for development and the ambitious housebuilding targets he has put in place.
“Buildings should be of the highest possible design and sustainability standards. For residential tall buildings, the mayor wants developments to make the maximum reasonable contribution to affordable housing – and his policies have led to a significant increase in the number of affordable homes approved on major schemes in London.
“The mayor’s 2021 London Plan requires developers to only build in suitable areas, to minimise carbon emissions from construction, and to contribute positively to the skyline and their locality. He will soon be launching a consultation on his next London Plan, to help shape how the capital will develop over the next two decades and support his vision for good growth, in which tall buildings must be considered.”
