House Building: London

[David Mundell in the Chair]

I beg to move,

That this House has considered Government support for housebuilding in London.

It is a pleasure to serve under your chairmanship, Mr Mundell. I thank all hon. Members who enabled me to secure this important debate. It could not be more timely, as house building in London has collapsed. In the first nine months of 2025, construction began on only 3,248 homes. Molior London predicts that just 9,100 homes will be built across 2027 and 2028—that is under 5% of the Government’s target for London. London is supposed to deliver more than a quarter of the Government’s 1.5 million homes target, but given the construction slowdown, that target appears to be dead in the water. That is the inevitable consequence of the Mayor of London’s disastrous London plan and the Labour Government’s anti-growth policies.

Three things have gone wrong. First, Sadiq Khan’s London plan has comprehensively failed to get London building. With more than 500 pages and 123 planning policies, the London plan makes it more complex and expensive to build in London. A 2024 review found that it takes seven weeks longer to determine major planning applications in London than in the next four largest cities. Sadiq Khan’s planning requirements also add to the cost of building in London. For example, the London plan goes beyond the national energy requirements, imposes carbon targets, and has policies on overheating and energy statements. Whatever the merits of those policies, they all add to the cost of building homes. In places, Sadiq Khan’s planning policies actively restrict house building. For example, the London plan effectively bans house building on large swathes of industrial land, often within walking distance of public transport.

My hon. Friend is painting a really bleak picture for London. Does he agree that to build the homes that we need in this country, we should focus not only on increased density in our city centres, but crucially on brownfield sites? We are not seeing from the Government a determined brownfield-first approach to housing that would protect the green belts surrounding our towns and cities.

I agree that we should have a brownfield-first approach, seeking to protect our green belt and countryside wherever possible. I understand my right hon. Friend’s concern and her representations on behalf of her constituents.

The Home Builders Federation warns that the London plan’s net zero requirements are imposing carbon offset payments of £3,000 a home. Even when building on brownfield land is allowed, it is fraught with problems. The mayor requires 50% of homes to be affordable, which, given the remediation costs on those sites, makes development unviable. Altogether, the London plan review in 2024 found that Sadiq Khan’s policies frustrated, rather than facilitated, development on brownfield land. That is why it is so disappointing that the Government stopped the mandated partial review of the London plan a year ago, saving their mayor’s blushes.

Secondly, Sadiq Khan’s affordable homes target has made many housing projects unviable in London. By demanding that 35% of homes built privately are affordable, he has made house building unviable in London.

The hon. Member is painting a picture that I do not recognise in my London constituency. Is he aware that, as Mayor of London, Sadiq has averaged 10,000 more new homes completed a year than under Boris Johnson’s mayoralty? He has got house building going in a way that the Tory mayor could not.

I appreciate the hon. Lady’s defence of her mayor, but I do not believe that most would recognise her statement.

My intervention is similar. Under Sadiq Khan’s period in City Hall, there have been 8,236 Greater London Authority-funded affordable starts in my borough of Southwark, including 636 completions in the last year. That somewhat contradicts the hon. Gentleman’s statements. Rather than trying to pin it on the mayor, could it be that the hon. Gentleman’s council is failing on this front? Perhaps we could be working together, rather than trying to pin it on one man.

Since May 2022, Bexley council has built 1,836 homes. Of those, 619 are affordable, making up 33% of all new housing, so I do not agree with the statement the hon. Gentleman just made.

I commend the hon. Gentleman for securing the debate; he is absolutely right to underline this issue. Older couples whose families have flown the nest want to downsize but cannot find an affordable house in a suitable area, and that problem is replicated throughout the United Kingdom. Does he agree that that is a critical factor in sorting out affordable housing provision in London or, indeed, anywhere?

I absolutely agree, and I appreciate the hon. Gentleman making one of his well-respected interventions in this important debate. We have to make sure that across the country, we are building the homes that people want to live in and that people can afford, including people in older age.

Demanding that 35% of homes built privately are affordable has made house building in London unviable. The higher 50% target for industrial land also applies to public land, which, again, has effectively blocked development in the capital. This policy may seem like a good way to get London building more social housing, but it has hugely backfired. The policy is effectively a tax on house building. It makes some development unviable and deters investment. It ultimately means fewer homes and higher costs. If a developer cannot afford the target, they face six burdensome checks on the project’s viability before, during and after construction.

The key thing is that until the Government recognise that they need to put some support into brownfield regeneration, our green belt and our green spaces will always be under threat.

I absolutely agree. We need to unlock brownfield sites in the interests of current and future generations that want to own a home.

If there is any surplus profit in the situation I was describing, the developer will lose it, but if they make a loss, the number of affordable homes required will not be reduced. For a decade, London Conservatives have warned that this policy will harm house building. Today, we see the consequences. Sadiq Khan’s failed London plan has created a perfect storm, compounded by failing demand, policy costs and regulatory delays.

Will the hon. Gentleman give way?

I am going to make a bit of progress, because I have been up and down quite a lot, and I am not fit enough to keep doing it.

Under this Labour Government, more and more first-time buyers are unable to afford a home, and they are the primary market for new builds in London. Over 3,700 new homes are sitting unsold. This is not a market where developers will build more. The Labour Government were wrong to slash first-time buyers’ stamp duty relief, costing first-time buyers up to £11,250 more in taxes. That is why the Conservatives’ plan to abolish stamp duty is the right one, and the Labour Government must rule out further market-suppressing tax rises.

Developers also face excessive policy costs—section 106 payments, community infrastructure levy payments, mayoral community infrastructure levy payments, carbon offset levies, biodiversity net gain requirements and the new building safety levy. The collective cost of those demands makes it too expensive to build. To make matters worse, on top of the burdensome London plan, the well-intentioned post-Grenfell Building Safety Regulator is now delaying building in the capital. It has rejected 70% of building safety designs, and some completed projects have had to wait 18 months for approval before people can move in.

I am grateful to the hon. Member for giving way. I have listened carefully to his analysis of the problem—I have waited to hear the full analysis—and I would be grateful for some reflection on why the deregulatory proposals he is making were not brought forward under the previous Government when there was clearly an opportunity to do so.

I appreciate the argument the hon. Lady is trying to make, and I am about to come on to some suggestions to hopefully help the Government.

The mayor has had strategic planning powers in the capital for nine years, and he was awarded £9 billion of affordable homes money by the previous Government. We have to be clear about where blame in the capital lies.

I am listening to the hon. Gentleman’s argument about strategic planning, but I believe every Member present, including myself, has substantial experience in bringing forward new genuinely affordable homes. We all know that it requires finance and real delivery focus, particularly in local authorities. Can the hon. Gentleman reflect on his time in local government and how many genuinely affordable council homes were brought forward in that period? Obviously, the ability to deliver from a council setting is a key part of solving this important challenge for London.