New measures to boost housebuilding in London

The government has announced new emergency measures to tackle the current housebuilding crisis in London and unlock tens of thousands of homes.

The current Mayor of London, Sadiq Khan, has started more new council homes that at any time since the 1970s and completed more new homes in London than any time since the 1930s.

However, the government has highlighted current challenges due to a combination of the legacy of the previous government, impact of the Covid-19 pandemic, high interest rates, spiralling construction costs, regulatory blockers and wider economic conditions. A third of boroughs recorded zero housebuilding starts in the first quarter of the year.

Now the housing secretary and Mayor of London have agreed to take decisive action to tackle the housing crisis.

Time-limited, emergency measures will unlock development by making sites more viable and incentivise developers to get spades in the ground through a fast-tracked planning process for sites with at least 20 per cent affordable housing.

Targeted measures will tackle squeezed viability, including the removal of design guidance that constrains density and temporary relief from development levies for schemes able to start promptly and guarantee affordable homes for Londoners.

The Mayor will be given new powers to fast-track housing, including the ability to review and call-in housing schemes of 50 homes or more where boroughs are minded to refuse.

The government has also confirmed an initial £322 million to establish a City Hall Developer Investment Fund to ensure the Mayor can further increase housebuilding.

Housing Secretary Steve Reed said: 

“Getting spades in the ground in London is crucial if we want to see the biggest increase in social and affordable housing and meet our target of delivering 1.5 million homes in our Plan for Change.   

“I have worked closely with the Mayor of London to give the capital the shot-in-the-arm it needs to ensure more Londoners have an affordable home of their own.”  

The Mayor of London, Sadiq Khan, said: “Affordable housing has always been a top priority for me as Mayor. We have started more new council homes in London than at any time since the 1970s and, prior to the pandemic, completed more new homes in London than any time since the 1930s. But there’s now a perfect storm facing housebuilding in London due to a combination of high interest rates, the rising cost of construction materials, the impact of the pandemic and ongoing consequences of Brexit. All of this means we are now in the midst of the most difficult period for housebuilding since the global financial crash.  

“Urgent action is required, which is why I’ve been working with the government on this package of bold measures. I grew up in a council house, so I know the importance of social and affordable homes. I’m not willing to stand by while the supply of affordable housing for Londoners dries up. With these significant new powers and the initial £322 million of funding from the government – plus the short-term emergency action to get more investment flowing into affordable housing – I’m confident that we can kickstart housebuilding and deliver more of the affordable homes Londoners badly need.     

“I will always do everything I can to accelerate the delivery of genuinely affordable homes as we continue to build a better, fairer London for everyone.”