If the promise is good growth in every postcode, London can’t be an afterthought

As ministers shift their focus away from London, it's crucial to remember the city's pivotal role in the UK economy, says Richard Smart. With the upcoming Budget, discussions will likely center around addressing the cost of living and redistributing investment across the UK's regions. However, ministers must not overlook the fact that London's success is vital to the overall economy.

The "good growth in every postcode" promise must extend beyond the capital. London's long-term fundamentals remain robust, boasting top-ranked universities, being a global hub for talent and businesses, and housing a significant number of startups and unicorn businesses. However, London's growth is contingent on its ability to attract and retain talent, which is threatened if housing supply doesn't keep up with demand.

This leads to difficulties in recruiting employees, retaining young people, and maintaining the competitive edge that has driven London's growth for years. Policymakers have taken steps to address housing, such as announcing emergency measures for housebuilding, committing £324m to the City Hall Developer Investment Fund, and releasing draft plans for 2026.

Yet, the city's housing crisis is evident, with high construction costs, rising interest rates, and limited viability making it challenging to develop new housing. Innovative funding models, like the Greater Manchester Good Growth Fund, have shown promise in bridging viability gaps and encouraging private investment. In London, targeted intervention could unlock 38,000 build-to-rent homes by narrowing viability gaps and drawing in institutional investment.

Despite London's complex governance structure, the city's housing and growth challenges necessitate continued government support. Collaboration between sectors, combining public and private capital, is essential for achieving good growth in London.