London 'needs 600,000 new homes to avoid housing crisis'

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Almost 400,000 new council homes will have to be built in London at a cost of some £9bn to avert a housing crisis, a leading lobby group warns today.

Almost 400,000 new council homes will have to be built in London at a cost of some £9bn to avert a housing crisis, a leading lobby group warns today.

The investment in social housing would have to be accompanied by up to 200,000 new private sector dwellings, according to the business lobby group London First.

It said a hike in spending in housing was just one part of a shopping list of £100bn of new investment needed on transport, health and education over the next 14 years to sustain London as a world city.

It has launched a campaign ahead of the Government's comprehensive spending review (CSR) in the summer to ensure more money is earmarked for London.

Jo Valentine, the chief operating officer of London First, said that the capital's taxpayers made a net contribution of about £20bn to the rest of the UK every year.

"If the UK were a company, London would be its brand leader," she said. "As any business person knows you must continually re-invest in your leading brand and not treat it as a cash cow to be milked until it is worthless."

The population of London is estimated to grow by 700,000 by 2016, according to the Greater London Authority.

London First said this surge in numbers meant that public and road transport had to be improved, schools and hospitals had to be improved and expanded and more homes needed to be built.

London First said the £100bn represented was equivalent to £7bn a year or 6 per cent of the city's annual GDP

And it said that total could be achieved without massive investment from the private sector. It said £42bn in public money would have to be more than matched by £57.5bn of private sector investment.

It said transport needed £52bn, of which £22bn public and £30bn private, £28bn for housing, with a £9bn-£19bn split, £8.5bn for the NHS, composed of £3.5bn and £2bn, and £11bn on education, of which £4.5bn state funding and £6.5bn commercial investment.

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