The staggering cost of getting homes built in London compared with other parts of England has been laid bare in new research by a leading think tank.
Analysis by the non-partisan Centre for London has revealed how the ‘upfront cost’ of constructing 88,000 new homes a year - the Government’s annual target for the capital - is roughly 43 times higher than meeting the equivalent target in the West Midlands, and 36 times higher than in Greater Manchester.
The findings come as polling commissioned by the think tank and conducted by Savanta separately shows that 60 per cent of Londoners whose housing costs have increased in the last 12 months said they have considered moving out of the capital.
The analysis and polling were shared at the centre’s 2025 housing summit on Wednesday, where Sem Moema, chair of the London Assembly’s housing committee, warned: “If we don’t fix the housing crisis, the character of the city will be extinguished, as we’re hollowed out.”
Ms Moema, a Labour member representing Hackney, Islington and Waltham Forest at City Hall, added: “I see in my own constituency the hollowing out that occurs and continues to occur, when the failure to fix the housing crisis for a decade and a half changes the character of our city, and not for the better.
“In all three boroughs, we’re being forced to consider closing schools, because there are basically no children left in north east London. Families can no longer afford to own or even rent properties in my boroughs.”
In its new research, the Centre for London found that the crisis is being exacerbated by the fact that the upfront cost to developers, if they built enough homes to hit the Government’s target in the capital, would be at least £2.2bn. The estimate was produced by combining the costs associated with the Building Safety Levy, Section 106 agreements, the Community Infrastructure Levy and planning fees for local councils.
By contrast, the figure in the West Midlands metropolitan county - which includes Birmingham - was only £50.6m, and was only slightly higher in Greater Manchester, at £61.3m. Yet in the London borough of Wandsworth alone - which had the highest cost of any London council area - the estimate was £253.9m.
The think tank’s polling has meanwhile revealed the shocking number of Londoners who are living in poor quality homes. Some 31 per cent report living with damp or mould, 27 per cent say they are not able to keep their home warm even with the heating on, and 23 per cent claim to have encountered invasive pests such as rats, mice and bed bugs.
As home ownership becomes further out of reach for many Londoners, it raises urgent questions about future social challenges, the summit was also told.
Ms Moema said: “We have a generation who will never get on to the property ladder independently. When they retire, they will still need a home, but without the security of a property to support them, when their income is fixed.
“We need to confront this reality. As with climate change, the costs of not doing anything will be greater than the costs of further investment.”
Commenting on the Labour Government’s approach to tackling the housing crisis, Centre for London CEO Antonia Jennings said: “The changes made thus far are encouraging – we’ve seen increased investment in the Affordable Homes Programme, planning reform which allow building on low-quality sections of the green belt and the new Renters Reform Bill. But, these are only the very first steps.
“We urgently need ambitious solutions that respond to the scale of the challenges facing the capital. From historic levels of homelessness to the sky-high costs of building new homes, the Government must get behind London’s leaders and invest in the capital to finally turn the corner on the housing crisis.”
