Emergency Measures to Boost London Housing

London Mayor Sadiq Khan has announced a series of new “emergency” measures to address the sharp decline in housebuilding across the capital. The package includes lowering affordable housing requirements, granting new powers to the mayor, and creating a £322 million developer investment fund.

Khan described the situation as a “perfect storm” caused by rising construction costs and the lingering effects of Brexit, warning that swift action was necessary.

Under the government’s proposal—currently open for a six-week consultation—private developments providing at least 20% affordable housing will be fast-tracked through the planning system. This is a temporary reduction from the current 35% threshold. Of that affordable portion, 60% must be allocated for social rent.

The fast-track scheme will run until March 31, 2028, or until the publication of the next London Plan, whichever comes first, according to the Ministry of Housing, Communities and Local Government (MHCLG).

The mayor will also gain expanded powers, including the ability to review or call in housing projects of 50 homes or more, bypassing lengthy hearings. Additionally, Khan will have greater freedom to issue Mayoral Development Orders, limiting councils’ ability to block new housing. He will also be able to decide on projects over 1,000 square metres on greenbelt land.

The City Hall Developer Investment Fund, backed by £322 million in government funding, aims to accelerate housebuilding, although further details remain pending. Developers will also receive temporary relief from the Community Infrastructure Levy (CIL) if they commit to at least 20% affordable housing, with extra incentives for exceeding that level.

MHCLG confirmed that some design restrictions would be eased to give builders more flexibility—provided homes meet standards for ventilation, light, privacy, and heat control.

Housing Secretary Steve Reed said the initiative would help meet the government’s target of 1.5 million new homes, adding that the capital needs “a shot in the arm” to boost affordable housing delivery.

Craig Carson, Barratt London’s regional director, welcomed the announcement, saying it could “help tackle London’s housing crisis” and spur job creation and economic growth. However, he urged ministers to also consider support for homebuyers.

Last year, only 32,000 homes were completed in London—just 36% of the 88,000 required annually, according to figures from Savills.