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Last Updated: Wednesday, 9 June, 2004, 09:35 GMT 10:35 UK
It's grim down south
With the South East being so notoriously overcrowded and expensive will John Prescott's plan to build more homes in the area be the solution? The Money Programme investigates.

How will a Government-inspired home building scheme down South help the already over-crowed region? Can it cope with more people, more buildings and more traffic?

The situation is now so desperate that some councils are paying people to move up north and Kent County Council is backing a scheme for 10,000 Brits to move to France and commute to work through the Channel Tunnel. Critics fear it will only encourage the rest of the country to fall even further behind the crowded South.

There's no doubt that the current situation can't continue. Demand for housing in London and the south-east is easily outstripping supply. If demand for affordable flats and houses were conceivably to be met, it would need a building boom the like of which hasn't been seen for generations.

Is there money to fund such an enormous building scheme anyway? And, even if there were, what would mean for the south, which already has the densest housing in the country?

key workers

London needs about 45,000 new homes a year to keep up with demand, about 15,000 of these have to be "affordable" for key public workers such as police officers, firefighters, teachers, nurses and social workers - the people that the City needs if it is to continue operating.

The trouble is, the housing shortage doesn't just make it hard for these people to find suitable accommodation - it also keeps the price up so that whatever is available is excessively expensive.

Even a small flat outside central London can cost upwards of 100,000 - a price that is not affordable for people on salaries of 20,000.

Mayor of London Ken Livingstone is keen to ensure that housing is built for key workers who have been priced out of the City.

profiteering problems

Critics point out, however, that even if housing were to be made available, it would be hard to prevent the owner-occupier selling it off at a handsome profit just a year later.

Research shows that first-time buyers find the capital extremely difficult. It is closely followed by the south-east and then the south-west - thanks to Londoners who are cashing in on the property boom to sell their properties and move out of the capital.

The London effect is more than just about expensive and trendy loft apartments in the capital.

New York may have some answers. In the Big Apple, housing associations have begun experimenting by setting up integrated communities where the formerly homeless and key public sector workers live side-by-side.

revitalise derelict areas

The idea is that derelict buildings can be transformed into cheapish apartments and social centres, offering a mix of housing, support centres and other services to help people get back on their feet.

It's an idea that could win support in London, but such is the price of land that it requires generous benefactors to get it off the ground. Any derelict old warehouses, for example, may already have been put to work by developers keen to earn a living from the transformation of former industrial or brown-field sites.

This programme was first transmitted on Wednesday 11 June 2003.


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