The government and the Mayor of London have reached a consensus to reduce the affordable housing requirement for new developments in the city from 35% to 20%.

City Hall indicated that this decision aims to accelerate planning processes, encourage developers, and facilitate the construction of more residences.

Developers will be offered an expedited application process if they agree to include 20% affordable housing in their projects.

In addition to this announcement, the mayor has been granted expanded planning authorities and financial support.

City Hall will now have the capability to intervene in planning proposals involving over 50 homes that were previously declined by local councils.

Currently, they already possess the authority to intervene in projects with over 150 homes.

A new £322 million Developer Investment Fund has also been established by City Hall to stimulate developer participation.

In 2016, Mayor Sir Sadiq Khan emphasized that London needs to construct approximately 66,000 new homes each year to satisfy demand, with over half of those needing to be affordable.

In 2017, he reiterated the need for a streamlined process for major developments to achieve at least 35% affordable housing.

However, according to the Home Builders Federation, only 30,000 residential units were completed last year, while the government estimated that 88,000 homes need to be built annually to meet the city’s housing requirements.

Figures from City Hall indicate that during 2022-2023, 25,000 affordable dwellings were constructed, with fewer than 4,000 built in the previous year.

The mayor commented, “The pace of home construction in London has significantly slowed, mirroring a nationwide issue.

“I refuse to be passive in the face of this challenge, so in collaboration with the government, we’ve unveiled a short-term set of emergency measures to reinvigorate house building in London, resulting in more affordable homes that are critically needed by Londoners.”

City Hall stated that the severity of the housing crisis over the past few years necessitates “emergency measures to revive construction.”

The government identified a “perfect storm resulting from rising construction costs, elevated interest rates, the previous administration’s decisions, consequences of the Covid-19 pandemic, regulatory hurdles, and overall economic conditions,” creating an urgent demand for increased housing availability.

Housing Secretary Steve Reed remarked, “Initiating construction in London is vital if we aim to achieve a substantial rise in social and affordable housing as part of our goal of delivering 1.5 million homes in our Plan for Change.

“I’ve collaborated closely with the Mayor of London to provide the capital with the boost it needs to ensure that more residents have access to affordable housing.”

In September, Reed announced plans to create three new towns to meet the objective of constructing 1.5 million homes by 2029.

Andrew Boff, the Conservative chair of the planning and regeneration committee of the London Assembly, criticized the mayor for not reducing targets sooner.

He stated, “We’ve been advising him since 2016 that these unrealistically high targets hinder the construction of the homes Londoners need, making this a somewhat embarrassing retreat for him.

“We must increase housing supply in London, and as long as these unattainable targets remain, we won’t achieve the homes required by residents.

“There are still substantial funds available to the mayor for housing.

“Once the homes are constructed, he can use those resources to enhance the supply of affordable housing.

“But without new buildings, we can’t create affordable options.”

Zoë Garbett, a Green Party member of the London Assembly, expressed, “Reducing these targets will not address our housing crisis.

“It will merely safeguard the profits of the same developers responsible for the situation, while exacerbating costs and diminishing the availability of essential social housing.

“The mayor claims to prioritise the construction of affordable residences, but if he is sincere, he must vocally advocate for increased government funding for the next generation of social homes.”

Suzanne Muna from the Social Housing Action Campaign (SHAC) expressed, “The notion that we can resolve the housing crisis by cutting back on sub-market homes is absurd.

“It betrays the Labour government’s and mayor’s commitment to combat homelessness. This approach will not alleviate homelessness.”

Regarding the reduction in the 35% requirement for new projects, she remarked, “I doubt this decision will garner much public support in London.

“When you converse with individuals about their financial situation, housing emerges as their primary expense, consuming around 40% of income.

“This trend is worsening, with housing costs steadily taking up a larger share of earnings, while wages are not keeping pace.”

Councillor Grace Williams, a member of the London Councils focusing on housing and regeneration, stated, “The government and mayor’s recent announcements signal a notable shift in strategy.

“Local boroughs will need to analyze these proposed changes closely to determine their impact on housing availability in our communities.

“Ultimately, given that nearly 300,000 homes have already received planning approval in London and remain unbuilt, it is imperative that developers fulfill their commitments to collaboratively address the housing crisis our city faces.”