London needs 50,000 new homes a year over the next two decades, say business leaders

Fresh calls have been made urging the chancellor to allow local councils to borrow more in a bid to address London’s housing shortage.

The London Chamber of Commerce and Industry (LCCI) has warned Philip Hammond that at least 50,000 new homes are needed every year over the next two decades to keep pace with London’s rapidly increasing population.

In its budget submission, the LCCI has called on Hammond to review the local authority housing revenue account borrowing cap in an attempt to boost estate regeneration.

A recent LCCI-commissioned poll, by ComRes, of over 1,000 London businesses found that 48% ranked better availability and affordability of housing as the top two ways to improve retention of staff.

LCCI chief executive, Colin Stanbridge, said: “Rising housing costs and the lack of affordable homes, either to rent or to own, within commutable distances of workplaces is generating pressure on employers to increase wages, leads to limited employee productivity and can often create challenges in recruiting and retaining staff.

"Local councils should be empowered to build more local homes in their local areas. Removing their inability to borrow sufficiently to invest in housing could ease the pressure on our growing city”.

The LCCI has also called for business rates to be frozen, reviewed and, in London’s case, decoupled from the national rating system.