Housing crisis reached whole new level - council

Southwark Council leader Kieron Williams says help is needed to bring construction costs down

The hoardings sell a grand vision for the future. Coming soon, they trumpet - new homes... There are artists' impressions of what the new homes will look like, smiling residents seen walking through the new estate.

But for now, that is as close as the new estate at Bells Gardens in Peckham, south-east London, will get. Graffiti, instead, covers the hoardings.

The plan to build 80 council homes here, and 40 more on a site next door, were stalled a year ago - with no date yet for when work might start.

It is not the sort of place that council leaders normally like to take you to, but very much a sign of the times, according to Southwark Council leader Kieron Williams.

Southwark Council has built more than 1,700 council homes over the last five years, but has 17,000 people on its council house waiting list

The council's borrowing costs went up, the contractor's build costs spiralled - there was just not enough money to carry on with the scheme, Mr Williams said.

He is a Labour leader with a plea to a Labour chancellor ahead of Budget day.

"The housing crisis in our city has been going on for years but it's now reached a whole new level," he said.

"London is building more council homes than at any time since the 1970s but it's just not enough, we've got to build more."

Southwark has built more than 1,700 council homes over the last five years - and has a further 1,300 under construction - but has 17,000 people on its council house waiting list.

London Councils warned last week that temporary accommodation costs posted the fastest growing risk to the financial stability of councils

Mr Williams said: "We've got to pull every lever to get building again.

"Yes, we need to get the government to put more money into council housing, and I'm delighted they're committed to affordable housing, but we also need to get construction costs down and interest rates down."

'Housing crisis'

Last week, London Councils, the group that represents all local authorities in the capital, released its own figures on how much is being spent on temporary accommodation.

It showed that councils were spending £4m a day on housing more than 180,000 people.

Half of those were children, London Council said, meaning one child in 21, or roughly one in every classroom in the capital, was homeless.

And borough spending on temporary accommodation rose by 68% in the last financial year, with the group warning that it posed the fastest growing risk to the financial stability of councils.

Claire Holland, who chairs London Councils and is Lambeth Council's leader, said: "I think it would be fair to say we have a housing crisis in London.

"We've got a rising need and a rising complexity of need amongst our populations and we have got sky-rocketing costs.

"It's a perfect storm in terms of addressing the immediate issues and the longer term ones."

The government has announced it would spend a further £500m on affordable homes and allow councils to keep 100% of the money they make from selling council homes under the Right to Buy scheme.

London Councils welcomed this announcement and said it also hoped the government would go further in its budget to help local councils deal with their housing issues, as well as long-term funding for other services.