The Ministry of Housing, Communities and Local Government (MHCLG) announced yesterday (23 October) that the fast-tracked planning process would be available for sites with at least 20 per cent affordable housing, compared with 35 per cent under current Greater London Authority (GLA) guidance.
The GLA will consult on the terms of the new route over six weeks from November, the department said.
The package of new policies will remain in place until 31 March 2028 or the publication of the new London Plan, whichever is sooner.
Under the proposals, London mayor Sadiq Khan will also be granted the power to review and call-in housing schemes of 50 homes or more that boroughs have indicated they will refuse. City Hall will also be able to rule on developments of more than 1,000m2 that are on greenbelt land.
Khan will be able to carry out a call-in process without the need for a full hearing, potentially cutting six months from planning, according to the ministry.
It also confirmed an initial £322 million to establish the City Hall Developer Investment Fund, which was announced in June.
The moves come amid data showing that more than a third of London boroughs recorded zero housebuilding starts in the first quarter of 2025, despite Whitehall’s target of building 1.5 million homes by July 2029.
The cut to affordable housing proportions was trailed last month, with The Financial Times reporting at the time that industry insiders were pushing for an even lower target – between 10 and 15 per cent – than the one announced today.
MHCLG said housebuilders would be able to claim ‘time-limited emergency relief’ from the Community Infrastructure Levy (CIL) ‘where this is necessary to unlock development’ and where at least 20 per cent of the housing on their scheme is affordable.
It will apply to projects starting after the new regulations come into force and up to 31 December 2028.
‘Some design restrictions’ are also set to be withdrawn, with developers handed ‘flexibility’ so long as homes have adequate passive ventilation, daylight and privacy, and avoid overheating, MHCLG said.
Khan said affordable housing had always been one of his top priorities, but that construction inflation, high interest rates, the pandemic and Brexit had been a ‘perfect storm’ for housebuilding.
‘Urgent action is required,’ he said, ‘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.’
The moves were welcomed by Antonia Jennings, chief executive of the Centre for London thinktank, who pointed out that 336,000 London households were on the waiting list for a social home.
‘Many people are stuck in overcrowded, mouldy or unsafe housing,’ she said. ‘Something has to change.
‘The 35 per cent affordable homes target for new developments is admirable, and it’s one London should strive for in the long term. The reality is, however, that 35 per cent of nothing is nothing. When no new developments are being built, there will be no new social homes.’
She also called for further measures to help boost housing, such as increasing the number of construction workers in London, increasing the Local Housing Allowance to reflect market rent rises and better regulation of the private sector.
British Property Federation director of policy for real estate Danny Pinder said a ‘more pragmatic approach to affordable housing delivery is essential to start unlocking development’.
He backed the new policies but pointed out that development viability is a problem caused by ‘a myriad of factors across the tax and regulatory landscape’. He called for chancellor Rachel Reeves to deliver further help in her November budget.
Pinder added that the announcement would not solve the backlog of homes waiting to be signed off by the Building Safety Regulator.
Southwark Liberal Democrat group leader Victor Chamberlain, meanwhile, accused the government of ‘cosying up to developers’ and pricing local residents out of his borough.
‘We’ve already seen how weak this [Southwark] Labour council has been towards developers, letting them get away with offensively low affordable provision,’ he said. ‘And now we’re seeing that baked into policy from the very top of the Labour party in government.’
Comment -Architects Action For Affordable Housing (AA4AH)
Yesterday’s joint announcement by the government and the Mayor of London of a ‘package of support for housebuilding in the capital’ is a clear signal that central and city government recognise the scale of the housing crisis in London. With over a third of London boroughs recording zero housing starts earlier this year, a coordinated response is overdue. The measures outlined, from temporary Community Infrastructure Levy (CIL) relief and relaxed density guidance to a new City Hall investment fund, are ambitious in scope and tone.
[Our campaign group] welcomes this renewed focus on delivery and viability. Too often, good projects are stalled by short-term financial pressures and a lack of flexibility in the planning system. The recognition that viability remains a fundamental barrier to progress is an important step forward. As the announcement makes clear, the Government and Mayor have evidently concluded that 20 per cent of something is more than 35 per cent of nothing. It is a pragmatic acceptance that the capital’s housing delivery machinery has seized up. But pragmatism must not become a licence for lowering ambition.
Design quality must not be sacrificed
Relaxing design standards, particularly around dual aspect, core arrangements and cycle storage, may unlock some sites but must not lead to poorer quality homes that compromise daylight, ventilation or liveability. The lessons of past building booms are clear: cutting corners in design and environmental performance leads to social and financial costs that far outweigh the immediate gains in speed or volume.
We also caution against the framing of density as a purely technical constraint. Density done well, supported by investment in public realm, infrastructure and community facilities, can deliver thriving, mixed and sustainable neighbourhoods. The danger lies in density without design, where homes are treated as units rather than places.
20 per cent of something is more than 35 per cent of nothing
The proposed time-limited planning route, allowing schemes with 20 per cent affordable housing to proceed without viability testing, could speed up approvals. Yet this must be accompanied by rigorous monitoring, transparent gain-sharing mechanisms and clear expectations for long-term affordability. Without a consistent commitment to genuine social rent and community benefit, “affordable” risks becoming an empty label.
The new powers and funding for the Mayor, including the £322 million Developer Investment Fund, could be transformative if deployed with a focus on long-term stewardship, design quality and sustainability. AA4AH believes that only through the alignment of public investment, good design and a stable, long-term policy framework can London deliver the affordable, low-carbon homes it needs.
Above all, this package must be the start of a deeper commitment, not a temporary intervention. The collaboration between government, City Hall, boroughs, developers and architects must now focus on creating places that endure, not just schemes that start.
We call on both the government and the Mayor to ensure that these measures are implemented with design quality, social value and climate responsibility at their core. London cannot afford another cycle of short-term incentives and long-term regret.