5 December 2017 at White Collar Factory
Last week’s EG event ‘Question Time London’ saw a great reception, and an insightful discussion amongst both the panel and the audience. Chaired by Damien Wild, Editor at EG, the panel consisted of Bill Hughes, Head of Real Assets at Legal & General Investment Management, Max Farrell, Partner at Farrells Architects, Emma Cariaga, Head of Operations at British Land and Benjamin Lesser, Development Manager at White Collar Factory.
Damien Wild opened the discussion by addressing the fact that the property industry is seeking stability, and unfortunately many have felt that in the past year politician have done very little to restore faith in them and their support of the industry. Max Farrell supported this statement when discussing general views and opinions of Sadiq Khan and his efforts, arguing that what the industry needs is more leadership and as a result, Khan should ‘champion big projects’ and participate on panels. Bill Hughes continued the debate by addressing his ‘aggressive approach to affordable housing’ and the questioned the practicality of creating targets before considering what the city actually needs.
The New London Plan was discussed at length as an audience member asked if will help the industry and answer London’s housing needs. Emma Cariaga was the first to speak on this and suggested that the plan is essentially flawed and does not address the issue of affordable housing in a practical way. She argued that the plan was ‘focused on ambition, not practical solutions’. Public sector agencies should be granted the resources to deal with this, rather than focusing on selling land to the biggest bidder. On the commitment to build 300k houses per year as outlined in the plan, Cariaga highlighted that such a target has not been achieved for decades and when it was achieved, it was led by local authorities.
In addition to the suggestion that the public sector should lead the initiative, Farrell drew attention to a need to adopt modern methods of construction in order to achieve or come close to achieving such targets. Modern methods of construction prove to be cost effective, better quality and ensure a quicker build. Farrell argues that we can still put a warranty on homes built via modern methods as the quality can be better that those built via traditional methods. In the UK less than 5% of homes are built using modern methods, compared to Japan at around 30-40%. We need to look to how other countries deal with housing demands, like the success seen where minimum space standards don’t exist for example.
Benjamin Lesser was more optimistic about the New London Plan and suggested it was a positive step in refining the previous plan. He argued that the 1847 Town & Country Act is in need of revision and it does not reflect how we are living now.
The debate continued to discuss whether we should stretch the GLA region, in which there was a resounding response led by Lesser that there needs to be a strategic review of boundaries as we now consider speed of travel rather than distance, which widens the existing boundaries. Cariaga agreed that a wider region will be part of the housing solution moving forward as ‘transport improvements have made London feel very small’.
The big buyers of 2018 were identified as China, Hong Kong and the rest of Europe, with the common understanding that London is a safe place to invest. Hughes suggested that investors may start looking outside of London based on affordability.
As a roundup to close the debate, Wild asked each of the panellists to make a prediction for the industry in 2018. Hughes predicted that the market will see fragility around the occupier and a bigger difference between winners and losers, Farrell more optimistically suggested we’ll see a radical mix use of spaces and more connectivity along the river, Lesser urged for a need for a more ‘acute focus on what we are doing as builders of space’ to get it right for long-term value, and Cariaga predicted that London will have a well-deserved seat at the table during Brexit debates.