Insight

London Housing Delivery Crisis: GLA Announces Emergency Viability Measures

23.10.25

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Only 5,000 homes expected this year: London’s housing crisis forces a dramatic policy rethink

Molior’s research suggests fewer than 1,000 homes commenced construction in London during Q3 2025. At this pace, they estimate the Capital is on track for just 5,000 residential construction starts in all of 2025. That is 5.7% of the 88,000 homes they subsequently need completed. In Q1, twenty-three of London’s 33 boroughs recorded zero new housing starts in that quarter.

Completions are also weak. In 2024/25, there were 28,576 new homes completed across London. This is well below targets, but things are going to get much worse based on the current levels of starts.

Molior are projecting 9,100 homes completed across both 2027 and 2028. When London is supposed to deliver 440,000 of the Government’s 1.5 million homes over this Parliament, the housing delivery crisis in London has become a political liability. I understand that the pressure has been pilled on the GLA to act and today they have made announcement of emergency measures on viability.

Temporary 50% Community Infrastructure Levy (CIL) relief for qualifying residential schemes.

Applies to brownfield sites (not Green or Grey Belt) delivering at least 20% affordable housing. 

Student and co-living schemes are excluded. 

Relaxation of London Plan design standards to support density.


Key changes include:

  • Withdrawal of dual-aspect dwelling requirements.
  • Removal of restrictive guidance on dwellings-per-core ratios.
  • Reduction in cycle storage requirements

New “time-limited planning route” to temporarily reduce affordable housing requirements.

  • Applies to schemes with at least 20% affordable housing of which 60% must be social rented.
  • No upfront viability assessment required.
  • Grant funding available for around half of affordable homes at the benchmark rates.
  • Gain-share review if schemes extend beyond March 2030.
  • Green Belt sites are excluded.
  • Stopping the use of s73 applications for the renegotiation of s106 obligations (although hopefully we’ll get an easier route to revise this otherwise local authorities will be overburdened with full applications).

Implicit temporary removal of Late Stage Reviews.

The document states that schemes which meet the eligibility criteria (where the first floor of the scheme has been built by 31 March 2030), it will not be subject to further reviews. Late stage reviews only appear to apply where the scheme has not been delivered in line with the March 2020 deadline. 

 

Mayor granted expanded planning powers.

  • Ability to call in schemes of 50+ homes where boroughs are minded to refuse (down from 150 units).
  • New call-in powers for Green Belt and Metropolitan Open Land proposals (over 1,000 sqm) - previously they could only direct refusal or review.
  • Notably the Mayor refers to 'making the best use of any land released and avoiding low density sprawl', which may be an attempt to enforce City Halls density aspirations through the back door for Grey Belt sites. 

Creation of £322 million “City Hall Developer Investment Fund.”

Designed to unlock and accelerate delivery on strategic sites, building on previous GLA investment successes.

 

Implementation by coordinated Government and GLA consultations (from November).

Consultations on CIL relief, design policy changes, planning route, and Mayoral powers will each run for six weeks, followed by secondary legislation and emergency guidance. We also heard there will be an NPPF consultation before the end of the year, which we assume will be linked to National Development Management Policies.

 

Support for housebuilding in London - GOV.UK

Some key stats stand out:

5.7%

of London’s annual housing target will be delivered in 2025 – just 5,000 homes against the 88,000 required.

70%

of London boroughs recorded zero housing starts in Q1 2025, showing how widespread the stall in delivery has become.

9,100Homes

are projected to be completed in both 2027 and 2028 – just a fraction of the 440,000 London needs this Parliament.

This decline in delivery is not a temporary blip. It reflects deeper structural pressures for which there no easy answers. Rising building costs, inflation in materials and labour, regulatory burdens, and falling sales have all squeezed viability. Development margins are under strain. The risk profile for developers has worsened. The emergency measures are certainly helpful, but in many cases they reflect what is already happening on the ground.

 

Brownfield land and flatted development alone can not meet housing need and the delivery of Grey Belt sites needs to be accelerated to also help plug the gap. We have seen in this guidance an acknowledged that the GLA is looking to support this form of development, but also that they may seek to control densities of these developments, which would be a retrograde step.

 

Overall though, should these changes make it through consultation, they will be broadly welcomed when they are implemented in the New Year.

 

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Jamie Sullivan

Partner, Planning

Jamie brings extensive industry experience of greenfield Local Plan promotion as well as securing planning permission for large scale complex brownfield regeneration proposals.

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