We're going to run out of houses in London

Falling well short of projections.

New household growth projections released by DCLG this week show that over 525,000 new households that will be created in London between 2011 and 2021.

The supply pipeline suggests that delivery of new units will fall well short of this, with an estimated 277,000 new units expected to be delivered over the next decade.

According to Knight Frank’s head of UK residential research, Gráinne Gilmore: “The overall trend for development in London shows that demand for housing in the capital will continue to outstrip supply by quite some margin. There is widespread recognition of the housing shortage in the capital, with the Mayor pushing hard to encourage higher levels of development."

This news could further boost prices in the capital which are already at record highs. Since the end of 2007, which is considered to be the peak of the market in most developed countries, London property prices have risen by 7 per cent (Source: Land Registry).

London prime prices have risen by even more - they are up over 20 per cent since end of 2007 (Source: Knight Frank, £1m+ homes only). London prime property has performed particularly well recently with growth of 12.2 per cent in 2011 and 8.7 per cent in 2012. In the first 5 months of 2013, prime prices rose by another 3.2 per cent according the Knight Frank figures.

This has been fuelled mainly by foreigners buying in. According to Knight Frank, local buyers made up only half of London sales in 2012. Russian buyers made up a high 6.6 per cent, USA buyers 4.8 per cent, Indian buyers 4.4 per cent, French buyers 3.3 per cent, Italian buyers 2.6 per cent and South African buyers made up 2.2 per cent. Super-prime statistics published by Knight Frank are even more extreme with local buyers making up less than a third of London buyers in 2012. Super-prime refers to properties valued at more than £10m each.

Despite this strong growth, it should be noted that London prime prices are still at a similar level to the end of 2007 if measured in US dollar terms.

This is of course still significantly healthier than general UK house prices which are down over 34 per cent since the end of 2007 (if measured in US dollar terms).

Photograph: Getty Images

Andrew Amoils is a writer for WealthInsight

How Jim Murphy's mistake cost Labour - and helped make Ruth Davidson

Scottish Labour's former leader's great mistake was to run away from Labour's Scottish referendum, not on it.

The strange revival of Conservative Scotland? Another poll from north of the border, this time from the Times and YouGov, shows the Tories experiencing a revival in Scotland, up to 28 per cent of the vote, enough to net seven extra seats from the SNP.

Adding to the Nationalists’ misery, according to the same poll, they would lose East Dunbartonshire to the Liberal Democrats, reducing their strength in the Commons to a still-formidable 47 seats.

It could be worse than the polls suggest, however. In the elections to the Scottish Parliament last year, parties which backed a No vote in the referendum did better in the first-past-the-post seats than the polls would have suggested – thanks to tactical voting by No voters, who backed whichever party had the best chance of beating the SNP.

The strategic insight of Ruth Davidson, the Conservative leader in Scotland, was to to recast her party as the loudest defender of the Union between Scotland and the rest of the United Kingdom. She has absorbed large chunks of that vote from the Liberal Democrats and Labour, but, paradoxically, at the Holyrood elections at least, the “Unionist coalition” she assembled helped those parties even though it cost the vote share.

The big thing to watch is not just where the parties of the Union make gains, but where they successfully form strong second-places against whoever the strongest pro-Union party is.

Davidson’s popularity and eye for a good photo opportunity – which came first is an interesting question – mean that the natural benefactor in most places will likely be the Tories.

But it could have been very different. The first politician to hit successfully upon the “last defender of the Union” routine was Ian Murray, the last Labour MP in Scotland, who squeezed both the  Liberal Democrat and Conservative vote in his seat of Edinburgh South.

His then-leader in Scotland, Jim Murphy, had a different idea. He fought the election in 2015 to the SNP’s left, with the slogan of “Whether you’re Yes, or No, the Tories have got to go”.  There were a couple of problems with that approach, as one  former staffer put it: “Firstly, the SNP weren’t going to put the Tories in, and everyone knew it. Secondly, no-one but us wanted to move on [from the referendum]”.

Then again under different leadership, this time under Kezia Dugdale, Scottish Labour once again fought a campaign explicitly to the left of the SNP, promising to increase taxation to blunt cuts devolved from Westminster, and an agnostic position on the referendum. Dugdale said she’d be open to voting to leave the United Kingdom if Britain left the European Union. Senior Scottish Labour figures flirted with the idea that the party might be neutral in a forthcoming election. Once again, the party tried to move on – but no-one else wanted to move on.

How different things might be if instead of running away from their referendum campaign, Jim Murphy had run towards it in 2015. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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