Mayor of London Sadiq Khan and London Assembly member Lord Bailey are shifting blame after it emerged that housebuilding has dropped by 84% in a decade in the capital.
Construction work began on 5,547 new private-sector residential homes in 2025, compared with 33,782 in 2015, research from consultancy firm Molior has found.
Contractors are said to be going bust due to high construction costs, while a weak sales market is also behind the reduction.
Khan said numbers have been affected by the “disastrous legacy of the previous government, high interest rates, the rising cost of construction materials, the impact of the pandemic and Brexit, and Building Safety Regulator delays”.
Meanwhile Lord Bailey said: “I warned years ago that the mayor’s approach would lead to a collapse in housebuilding. Sadly, that is exactly what has happened.”
He added: “It is time for the mayor to take responsibility. His policies have stifled development, slowed delivery, and left Londoners paying the price through rising rents, soaring house prices, and the painful reality of being priced out of the city they call home.”
Khan has been Mayor of London since May 2016.
A spokesman for his office said they are encouraging housing providers to bid for £11.7bn of government investment through the Mayor’s Affordable Homes Programme, to deliver social and affordable housing across London.
Meanwhile it will work alongside the launch £332 million City Hall Developer Investment Fund to support large-scale projects in London.
The Docklands Light Railway’s extension to Thamesmead should also unlock up to 30,000 new homes
Dr David Crosthwaite, chief economist at BCIS, said: “London is a vital cornerstone of the government’s housebuilding ambitions.
“Yet the shortfall between the housing that’s being built and what’s required speaks to the combination of high costs for housebuilders and the higher interest rates that have been undermining both supply and demand.
“Building costs are still rising, but the situation has been compounded by levies on developers and the implications of holdups at gateway 2.
“There’s a good chance the Mayor of London faces mission impossible.
“It’s a time challenge more than anything.
“Consultation on emergency measures, which include temporary relief from development levies and the removal of design guidance, is yet to conclude and the latest data suggest process reforms at the Building Safety Regulator are working but not fast enough.
“London is quickly running out of road to reverse its housing crisis.
“Given the lack of incentive to build in light of weaker demand, further significant and immediate support for first-time buyers feels like the best place for financial and policy investment right now.”
