Debate on government support for housebuilding in London

The government has a target to build 1.5 million new homes in England by the end of the current Parliament. However, stakeholders have warned that in housing delivery in London, where around 440,000 of these homes will need to be built, is in a “major crisis”.

The government’s latest estimates show that 31,000 net additional homes were built in London in 2024/25, compared to a housing need of 88,000 new homes per year (according to the government’s standard method).

Figures for housing ‘starts’ (the number of new homes that begin construction) suggest that the delivery of new homes in London is set to slow further. According to residential development industry analysts Molior, just 3,248 new homes for private sale or rent began construction in London in the first 9 months of 2025.

There is also a shortage of affordable housing. In 2023/24 there were an additional 7,674 affordable homes in London, compared to an estimated need of 42,841 per year.

Industry group the Home Builders Federation has argued that “complex and unwieldy” planning policies, the building safety regime, and low demand from social housing providers are supressing development. Analysis from property consultancy Montagu Evans reached similar conclusions. Wider economic challenges, including rising costs and interest rates, are also having an impact.

Temporary measures to support housebuilding in London

On 23 October 2025 the government, alongside the Mayor of London, announced a set of temporary measures to support housebuilding in London:

• Schemes on brownfield land that deliver 20% affordable housing will receive 50% relief on Community Infrastructure Levy (CIL) charges imposed by borough councils.
• Design standards in the London Plan that limit density will be withdrawn or changed.
• Schemes on private land that deliver at least 20% affordable housing will be eligible for the fast-track planning application route. Currently developments need to deliver 35% affordable housing.
• The Mayor of London’s powers to call in planning applications will be enhanced. For example, the Mayor will be able to call in planning applications of 50 residential units or more (down from 150 units currently).
• The government will provide £322 million in grant funding to enable the Mayor to “unlock and accelerate” housing delivery.

Stakeholder response

The housebuilding industry generally welcomed the proposed measures, especially reducing affordable housing requirements. Home Builders Federation executive director Steve Turner called the announcement a “very positive move”.

The Centre for Cities and Centre for Policy Studies thinktanks concluded that the measures should increase housebuilding, but called for additional measures such as building safety regime reform and further changes to design standards.

Other stakeholders, including the Chartered Institute for Housing, expressed concern about the lowering of affordable housing requirements. Groups representing social housing providers called for greater policy and funding support to enable them to invest in affordable homes.