London’s housebuilding sector is set for a major boost after the Government and Mayor of London announced a comprehensive package of emergency measures designed to restart stalled developments and accelerate the delivery of affordable homes across the capital.
The joint intervention, which was confirmed by Housing Secretary Steve Reed and Mayor Sadiq Khan, aims to deliver “a London solution to a national crisis”, cutting through viability issues and planning barriers that have slowed construction in every borough.
Despite progress made through joint working between ministers and City Hall, London is currently building far fewer homes than required. High interest rates, inflation in construction costs, complex planning regulations and post‑pandemic impacts have all driven viability challenges.
Only 4,522 social and affordable homes started on site in 2024/25, a dramatic fall from the 26,386 starts in 2022/23. Leaders say the emergency package is essential to reverse this trend and restart activity across the market.
The measures announced offer targeted, time‑limited support to unlock stalled sites and incentivise faster approvals. Key interventions include:
- A new fast‑track planning route for developments delivering at least 20% affordable housing, enabling quicker decisions and accelerating delivery.
- Temporary Community Infrastructure Levy (CIL) relief for eligible schemes hitting affordable housing thresholds, with enhanced reductions for those exceeding them.
- Removal of selected Greater London Authority (GLA) guidance on density, removing constraints that have limited the number of homes built on land already allocated for development.
Refinements were made following consultation to ensure as many schemes as possible can benefit.
Developers will still be required to demonstrate progress. Schemes that miss agreed milestones will be subject to an Early‑Stage Review, which may require increased levels of affordable housing.
The Government has also introduced legislation to expand the Mayor’s powers to intervene when boroughs are minded to refuse planning applications of 50 homes or more. The new powers take effect in May.
This builds on reforms in the English Devolution Bill, which will cut up to six months from some planning processes.
The Mayor will also be empowered to act as decision‑maker for schemes over 1,000sqm on Green Belt or Metropolitan Open Land where appropriate, particularly on lower‑quality “grey belt” close to public transport. Ministers stressed this will not make it easier to build on high‑quality Green Belt.
The Government’s New Homes Accelerator, working with the GLA and the London Borough of Barking and Dagenham, has unblocked the long‑stalled Beam Park regeneration scheme, delivering 4,000 homes, including 1,500 previously delayed for a decade due to a single planning condition.
A new Beam Park rail station has now been confirmed as feasible within the existing rail network. Work is underway with the GLA, London Borough of Havering, Transport for London and partners to assemble the necessary funding.
The Accelerator has now expanded into a dedicated London branch, NHA LDN, alongside a new borough planning support service, ATLAS LDN.
Construction progress is being reinforced by the Building Safety Regulator, which has cleared nearly all legacy Gateway 2 cases. Over 10,500 new homes have been approved in the last 12 weeks - 3,800 of them in London.
The emergency package is backed by substantial investment, with the Government’s £39 billion Social and Affordable Homes Programme allocating up to £11.7 billion to London, which is significantly more than previous rounds.
A major component of the announcement is the creation of a £324 million City Hall Developer Investment Fund, managed by the GLA, focused on reviving stalled sites that can deliver completions quickly.
Housing Secretary Steve Reed said:
“The scale of the housing crisis in London demands action – so that’s what we’re doing.
“This decisive action will turn plans on paper into thousands of new homes in our capital, with a clear message to developers to get on and build.
“We’re kickstarting London housebuilding so more Londoners can rent or own a home that is genuinely affordable.”
Together, the measures aim to restore momentum in the capital’s housing market and support the Government’s mission to build 1.5 million homes this Parliament. City Hall will also gain the tools needed to move the capital back toward its annual target of 88,000 new homes.
Image credit: iStock
