Miliband Aims Silver Bullets at London's Housing Crisis

Labour leader Ed Miliband has pledged to tackle London's housing shortage with thousands of new homes, while closing loopholes that allow developers and investors to hoard properties in the capital.

Writing in the Evening Standard, Miliband said: "There is a chronic shortage of affordable homes in Britain, and nowhere is this clearer than in London."

He announced that Labour would develop a "next generation of new towns" similar to Milton Keynes and Stevenage, built on sustainable, flood-free sites, allowing professional to work and raise families in the booming south east.

Miliband also set out plans to speed up housebuilding in London's 32 boroughs, which would include taking action against property firms sitting on prime land.

The plans would also tackle the number of empty flats in the capital owned by absentee foreign investors.

Miliband suggested that developers could be stopped from advertising new flats overseas before Londoners are given a chance to rent or buy homes. Councils could also be allowed to double the amount of extra council tax on empty properties to punish wealthy foreign owners.

"We will address the scandals in the private rented sector and close the loopholes which allow desperately needed housing to stand empty for years," he said.

Miliband said the soaring cost of living in London is damaging the city's appeal as a business hub.

"It is also causing deep difficulty for employers, both in the public and private sector. Indeed, the CBI recently highlighted the cost and lack of suitable housing for skilled employees as the biggest threat to London's position as one of the world's greatest cities for business."

Meanwhile, British house prices have jumped at their the highest rate in over six years as the average asking price of a property is now £251,964 ($420, 460, €307,680) which is a whopping £16,223 more than a year ago.

According to the website Rightmove, House Price Index figures show this is the biggest increase year-on-year since November 2007.

New supply is scarcest in the south where increased demand is greatest, especially in London, (15%), the South East (13%) and South West (10%).

These levels of supply are all below the national average of 18% in other parts of the UK.