The government would be have to invest £3.1bn a year alongside a private sector partner to fund the project
Allowing disused commercial land and buildings in London to be redeveloped could provide up to 420,000 additional homes for the capital by 2036, according to a leading think tank.
Figures compiled by Policy Exchange found there are more than 500 hectares of empty or under-utilised industrial land across London alone – the equivalent to 750 football pitches – as well as a significant amount of vacant retail space in outer London.
If the government were to commit £3.1bn a year to finance the purchase of this land alongside a private sector partner, such as an institutional investor, around 21,000 homes could be built each year, the think tank’s report said.
It suggested the homes should be designed for the burgeoning private rented and shared ownership sectors, using pre-fabricating techniques to overcome skill shortages in the construction industry and other factors, such as adverse weather conditions, that slow up house building.
Rental income from the homes and the sale of equity stakes could allow the government to recoup its money within 20 years. The scheme would be the largest government investment and delivery on housing since the 1970s.
The report also said that the process of buying non-residential land could be sped up by giving extra powers to the Mayor of London to fast-track the purchase of business premises and land which have been empty or disused for two years more.
There are currently around 27,000 homes being built in London each year – significantly less than the estimated 50,000 homes a year the capital needs to keep up with demand.
Chris Walker, head of housing at Policy Exchange, said: “The government urgently needs to make bold reforms to the laws surrounding compulsory purchase of empty or under-utilised commercial properties to create a significant supply of land for new housing.
“It should seriously consider making the largest investment in housing since the 1970s to pay for land acquisition, land redevelopment and large scale house building.”