Developer Bombshell: Why Khan’s Plan Fails to Unlock 88K London Homes

The Mayor's £322m Emergency Fund and Planning Relaxations Deemed 'Incremental' by Major Developer, Casting a Shadow Over Capital's 88,000-Home Target.

London's deepening housing crisis has been dealt a fresh blow as a leading industry executive warned that Mayor Sadiq Khan's emergency plan will fall short of reviving the moribund housebuilding sector. The Mayor's ambitious pledge to deliver 88,000 new homes annually in the capital is already significantly off track, and the new measures intended to fast-track construction are facing sharp criticism from those on the front line of development.

Jennie Daly, the Chief Executive of major housing developer Taylor Wimpey, has publicly stated that the new funding package of £322 million and accompanying looser planning regulations fail to grasp the true magnitude of the challenges facing London. The emergency plan, which was agreed with the Housing Secretary last month, includes a reduction in the required proportion of affordable homes in new developments, dropping the target from 35% to 20%.

While welcoming the intervention, Ms. Daly dismissed the measures as merely "incremental." In her view, they will only allow "some sites that are at the margins of viability" to proceed, but do not address the systemic issues of high technical delivery and construction costs, nor the negative drag on house prices in the capital. Developers have long blamed the stringent requirement for affordable housing alongside a "burden of regulatory and policy requests" for rendering many projects financially unviable.

Ms. Daly pointed out a crucial economic hurdle: "Construction costs are exceeding sales prices, and in London we’ve got quite a negative drag on house prices. It [remains] a costly location to build." For the housing sector to take the necessary risks to build at scale, she argued, London must be made a more attractive location, insisting that the entire balance of risk and reward requires a comprehensive review.

The stark reality is that the major slowdown in construction rates has left the Mayor well short of his 88,000 homes-per-year target, a milestone deemed crucial to easing the capital's housing shortfall. The emergency package was designed to tackle this slump, yet industry experts remain sceptical about its ability to deliver the necessary volume.

Further complicating the outlook is the persistent economic uncertainty, which developers fear will hamper future growth. Taylor Wimpey, one of Britain's largest housebuilders, recently warned that speculation surrounding potential tax changes—including a possible mansion tax in the upcoming Budget—has cast a "long shadow" over what is a critical selling season for the industry. This uncertainty, according to Ms. Daly, is "unhelpful" and has potential implications for sector delivery well into 2026.

As London's order books, such as Taylor Wimpey's, show a noticeable contraction compared to the previous year, the question remains whether the capital's housing crisis is a never-ending cycle of high demand and stifled supply. Experts suggest that without a more radical and holistic approach that tackles fundamental viability issues—including spiralling costs and planning complexity—Mayor Khan's emergency measures risk being a temporary bandage on a deep and persistent wound.