London sits in the hands of the construction industry

Emily Follis

As housing tops the agenda for the mayoral candidates, London finds itself at a crossroads. With the capital rapidly approaching ‘megacity’ status by 2030, when it’ll be home to over 10 million people, London has two options: it can either build the infrastructure necessary to meet the needs of its growing populace and, by doing so, capitalise upon the economic benefits of an increased workforce or by failing to invest, risk its future competitiveness by increasing levels of congestion and overcrowding.

Tackling the housing crisis and addressing the city’s increasingly stretched transport network have been identified in the London Chamber of Commerce’s mayoral manifesto as being key to the capital’s future success, and the property and construction industry will play a hugely important role in deciding which path the capital will take.

Cause for optimism? Record numbers of workers are employed in construction and encouraging progress has already been made towards delivering the most ambitious transport infrastructure programme since the 1970s. The property industry has risen to the challenge and, with construction due to start on HS2 by 2017 and a concerted political effort to dramatically boost house-building the industry certainly looks set for further growth.

But are property and construction firms being held back? Despite record employment in the industry, an acute shortage of construction skills continues to jeopardise the delivery of crucial infrastructure projects. Firms are struggling to recruit the 224,000 extra workers which are needed across the construction sector by 2019. And it’s not just large-scale developments that are affected; 60% of small builders found difficulty in hiring bricklayers last year. Targeted investment in training the next generation of workers is essential to ensure the right skills are in place for the future. The Government’s target of creating 30,000 apprenticeships in the rail and road sectors is a welcome start.

LCCI welcomed in 2015 the creation of the London Land Commission, with a mandate to compile a register of available public land. This development was just one signal that, after decades of underwhelming house building, there is at last a consensus that one part of the solution to the housing crisis is getting the most out of London’s brownfield land. These areas, often formerly used by industry, are now prime opportunities for developers. However, in order to maximise the potential of the land identified, progress needs to be made towards cutting red tape and encouraging small builders into the market place.

An aspect of the housing crisis that is often underappreciated is the role that a well-connected transport system can play in unlocking areas for housing development. Although the Government’s commitment to overhauling London’s overburdened transport network is promising, steps must be taken quickly and investment must be sustained.

Today, London’s severe undersupply of housing and ageing transport infrastructure not only puts pressure on the capital’s workforce but also, increasingly, risks London’s ability to compete for talent and investment on a global stage.

At a time when London must embrace and prepare itself for ‘megacity’ status, the property and construction industry has never had such an important role to play.


Emily Follis, Policy Manager LCCI

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