A recent report titled Mind the Gap highlights the pressing need for changes in housing policies affecting developers in London. The authors suggest that these policies are the most complicated and burdensome found anywhere in the country. This increased complexity is part of the reason for a historic lag in new home construction. As London continues to adapt to and overcome its housing crisis, many stakeholders have been calling for fundamental reform to meet demands in the capital.
Sir Sadiq Khan’s strategic plan outlines a long-term framework for London’s development, aiming to deliver 440,000 of the government’s ambitious target of 1.5 million new homes by 2030. During the first half of this year, just 30,000 new homes were completed – the worst half-year trend on record. In the 2023/24 financial year, new home completions in London were down by 9% on the year before. The remainder of England experienced a much more modest drop of 5%.
Neil Jefferson, chief executive of the body representing homebuilders, the HBF, described the findings of the Mind the Gap report as “a huge wake-up call”. He thinks action by the government and Sir Sadiq Khan both are urgently required. To reverse the very dangerous downward trend of housing production in the capital, he insisted on the need to move quickly.
The administration’s report has gone above and beyond in recommending specific changes to ease the growing burdens developers are up against. One of these is a proposal to roll back the number of affordable homes required on new developments to a mere 25%. Given this, the report very strongly recommends that the Government cancels the next Building Safety Levy. Scheduled to be implemented starting in 2026, this levy would impose additional costs on developers who would then be responsible for remedying the defects.
Suzanne Muna from the Social Housing Action Campaign (Shac) has criticized the current approach to affordable housing, arguing that the desire to cut down on affordable homes stems more from “greed than with concerns over the complexity of planning.” Muna reminded us that barriers are in place “for a reason.” Further, she suggested that these barriers serve the interests of folks who have no interest in helping future homeowners.
John Myers, director at the YIMBY (Yes in my Back Yard) Alliance, shared insights on the current state of homebuilding in London. He noted that only 731 market rate homes have been begun in the second quarter of 2025. All of this drives home the compelling case to renew and accelerate the pace of homebuilding. Myers insisted that “the capital needs an urgent overhaul of housing policy if it is to support the housing needs of Londoners.”
He further stressed the gaps in current e-bike regulations. The expensive dual-aspect requirement, plus an arbitrary limit on the number of homes per staircase/lift core, make it near impossible to invest and develop on brownfield sites. These requirements render the majority of projects economically unfeasible, worsening London’s housing crisis.
City Hall has responded to these challenges by stating that Sir Sadiq Khan is doing “everything in his power to deliver more homes of all tenures.” Critics have said it’s not nearly enough, and that more decisive action is needed. They argue that it is critical for London to hit its housing targets and deliver affordable homes across the capital for Londoners.
