London Mayor Sadiq Khan is in dispute with property developers over the timeline for implementing new housebuilding measures intended to stimulate construction in the capital.
The Government announced plans last year to reduce the affordable housing requirement in developments from 35% to 25% and relax certain design standards. However, the final proposals are not expected until next month, with changes not taking effect until June. Planning approval must be secured by March 2028.
Construction sector decline
London’s new-build sector has contracted significantly over the past decade, with construction starts falling by 84%. Analysis by residential development research firm Molior found that construction began on just 5,547 new private-sector homes in London last year, down from 33,782 in 2015. The capital requires approximately 88,000 new homes annually.
The decline has been attributed to rising construction costs, reduced new-home sales, and contractor insolvencies.
Industry response
Steve Turner, Executive Director at the Home Builders Federation, said: “The timelines are incredibly challenging and will inevitably limit the impact they have, not least because they have not yet been formalised and implemented.”
Developers have reportedly told The Times that the proposed plan is unworkable under the current timeline.
A spokesperson for the Mayor’s office stated: “Housebuilding in the capital and across the country continues to be held back by a perfect storm caused by the disastrous legacy of the previous government, high interest rates, the impact of the pandemic, the rising cost of construction materials, Building Safety Regulator delays, and the hugely damaging impact of Brexit.”
National targets
The Labour Government has set a target of 1.5 million homes to be built nationally by 2029. Last week, Housing Minister Matthew Pennycook acknowledged that the government’s housebuilding plans could lead to a reduction in property prices.
Industry experts have questioned whether the national target is achievable given current market conditions and regulatory constraints.
