London must double new builds to keep pace

London needs at least 50,000 new homes a year to keep pace with demand, research released by Savills has revealed.

The figure is twice as many of the number of homes currently being built and 20,000 more than the Mayor’s minimum target.

Boris Johnson has said that City Hall is on track to deliver 100,000 affordable homes over his two mayoral terms.

So far 56,000 affordable homes have been built since the Mayor took over in 2008 with a further 31,000 due to be built by 2015.

Jim Ward, director residential research at Savills, said: "Growing demand for homes exceeds the Mayor's minimum housing target which should be at least 50,000 new homes per annum.

“We forecast a supply gap of 115,000 homes over the next five years across all tenures assuming that funding for affordable housing is forthcoming at current levels.”

Savills said developers need to find £6bn of development funding a year to build the homes required to fill the supply gap whilst buyers would require a further £7.5bn to buy the homes.

Ward added: “The scale of the funding gap is massive. To build this many extra homes, an annual gap of at least £14 billion needs to be plugged.”

As such ward said he expects the rental sector to continue to take up the slack and Savills predicts that more than a third of London’s housing stock will be on the rental market by 2017.

 Peter Lawrence of Lawrence Rand said: “The position across London in regards the volume of new home building echoes that across the UK which saw less than 100,000 new starts in 2012.

New homes across the privately owned, social and private rental sectors are required.

At Lawrence Rand we are delighted to be working with the London Borough of Hillingdon on a number of new home schemes for first time buyers."