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London eases affordable housing requirements to accelerate housebuilding amid housing crisis

Friday, 24 October 2025 4:08AM UTC

The UK government and the Mayor of London have introduced a temporary package to boost homebuilding by reducing affordable housing requirements and easing planning standards, aiming to address the capital’s severe housing shortage.

The UK government and the Mayor of London have unveiled a comprehensive, time-limited package aimed at invigorating the capital's sluggish housebuilding sector—a critical step given the city’s pressing housing shortage. Central to this strategy is a temporary reduction in the affordable housing requirement for new developments from 35% to 20%, a significant easing designed to boost development viability and expedite planning approvals on private land. Developers committing to this 20% threshold will be able to secure planning permission without undergoing the usual viability assessments, a measure expected to streamline the approval process. This new planning route will be limited to two years and includes a provision allowing social housing grant funding to be applied to half of the affordable housing quota, a notable shift since grants were previously barred from subsidising section 106 homes bought from private developers.

Complementing this, changes to design standards aim to unlock higher density in developments. The policy relaxes the rigid application of dual aspect dwelling requirements—traditionally seen as a barrier reducing the number of homes per site—while maintaining essential criteria around ventilation, daylight, privacy, and overheating avoidance. The guidance on limiting the number of flats served by a single core (such as staircases or lifts) will also be relaxed, allowing more homes within existing building footprints. Additionally, cycle parking requirements will be pared back, reflecting flexibility in accommodating residential needs without unduly constraining density. These design amendments work alongside a temporary Community Infrastructure Levy (CIL) relief—beginning with a 50% reduction for qualifying schemes delivering at least 20% affordable housing, with potentially higher relief for greater affordable housing levels—intended to alleviate developers’ upfront financial burdens and invigorate stalled projects.

Beyond supporting immediate housebuilding activity, the government and City Hall have granted the Mayor new powers to intervene more decisively in planning. The Mayor can now review and "call-in" applications for schemes over 50 homes if local boroughs oppose them and similarly call-in significant developments on sensitive green belt or Metropolitan Open Land sites. This enhanced authority aims to override local refusals in the interest of securing greater housing supply, including the ability to make Mayoral Development Orders for strategic schemes without borough consent. Moreover, a City Hall Developer Investment Fund has been established with an initial £322 million allocation, further signalling a proactive role in catalysing development.

These moves respond to stark figures illustrating London's housing crisis. Greater London Authority (GLA) data revealed that only 3,447 new homes broke ground in the first half of the 2024/25 financial year—a marked downturn from 27,210 for the entire previous year, which was itself a 15-year low. The overall affordable housing starts are troublingly low, with just 3,991 subsidised affordable homes commenced during 2024/25, marking the second-lowest recorded total and necessitating revised housing targets for the mayor's office. The current affordable housing target has twice been adjusted, now set between 17,800 and 19,000 affordable homes by March 2026, reflecting the sector’s challenges.

Housing Secretary Steve Reed emphasised the necessity of accelerating construction to meet the government’s broader "Plan for Change" goal of delivering 1.5 million homes across England. He framed the package as vital "to ensure more Londoners have an affordable home of their own." London Mayor Sadiq Khan, who spoke from personal experience growing up in a council house, highlighted the urgency of the measures to prevent the affordable housing supply from shrinking any further. Khan has also been championing ambitious programmes beyond these immediate policy tweaks, including a £3.5 billion housebuilding programme aimed at creating 40,000 new council homes by 2030 and leveraging the biggest and longest government funding settlement for affordable housing in London’s history, totaling £11.7 billion over ten years.

Industry observers and City Hall sources note that this scaling back of affordable housing requirements is a pragmatic, temporary intervention tied closely to current market conditions. The reduction is expected to remain in place only while the construction sector faces significant headwinds, with an anticipated return to higher affordable housing quotas before the 2028 mayoral elections. The new planning framework will also feature a "gain-share mechanism" designed to increase affordable housing delivery from sites not completed by 2030, should market conditions improve, thus allowing developers to share any uplift in returns by adding more affordable units over time.

Overall, the package reflects a balancing act: easing requirements to stimulate supply while maintaining a strong commitment to affordable housing through innovative funding and planning powers. Whether these measures will yield the targeted acceleration in London's housing delivery remains a key question, but the concerted effort by both government and City Hall marks an important strategic shift in addressing one of the capital’s most stubborn challenges.

📌 Reference Map:

Paragraph 1 – ^[1] (Building Design Online), ^[5] (Housing Today)
Paragraph 2 – ^[1] (Building Design Online)
Paragraph 3 – ^[1] (Building Design Online)
Paragraph 4 – ^[1] (Building Design Online)
Paragraph 5 – ^[1] (Building Design Online), ^[4] (Evening Standard)
Paragraph 6 – ^[1] (Building Design Online), ^[4] (Evening Standard), ^[7] (Evening Standard), ^[6] (London City Hall)
Paragraph 7 – ^[1] (Building Design Online), ^[2] (Evening Standard), ^[3] (ITV News), ^[5] (Housing Today)

Source: Noah Wire Services

More on this

https://www.bdonline.co.uk/news/government-and-city-hall-confirm-two-year-cut-in-affordable-housing-requirements-from-35-to-20/5138905.article - Please view link - unable to able to access data
https://www.standard.co.uk/news/london/london-housing-developers-20-rule-affordable-homes-sadiq-khan-steve-reed-b1253441.html - The Standard reports that London developers have been advised to expedite new housing schemes to benefit from a temporary reduction in affordable housing requirements. The proportion of affordable homes required in new developments is being reduced from 35% to 20%, but this change is expected to last no more than two years. The adjustment aims to stimulate the housing market amid current challenges in the construction industry. A City Hall source indicated that the new rules would remain in place only while the construction industry faces difficulties, with expectations of returning to higher affordable housing ratios before the next mayoral elections in May 2028.
https://www.itv.com/news/london/2025-10-23/affordable-homes-target-slashed-to-20-to-tackle-londons-housebuilding-crisis - ITV News London reports that the UK government has announced a reduction in the proportion of affordable homes developers must include in schemes to expedite planning approvals, lowering the requirement from 35% to 20%. This measure is part of emergency actions to address London's housebuilding crisis, which has been exacerbated by factors such as rising construction costs and high interest rates. The initiative aims to accelerate the sluggish housing market in the capital, with the government attributing the current challenges to a combination of economic conditions and regulatory blockers.
https://www.standard.co.uk/news/london/housing-crisis-affordable-homes-sadiq-khan-mayor-2024-25-angela-rayner-b1227661.html - The Standard reports that the UK government has reduced the affordable housing targets for London after the number of affordable homes started last year was revealed to be the second lowest on record. Construction began on a total of 3,991 properties being subsidised by the mayor in 2024/25, according to annual data published by City Hall. This is the second time that the mayor’s housing targets have been reduced, with the current target now set between 17,800 and 19,000 affordable homes by March 2026.
https://www.housingtoday.co.uk/news/government-and-city-hall-confirm-two-year-cut-in-affordable-housing-requirements-from-35-to-20/5138901.article - Housing Today reports that the UK government and the Mayor of London have announced a package of support to boost the sluggish housebuilding market in the capital. A joint policy paper confirmed that developers will be able to secure planning permission without a viability assessment on private land where they commit to 20% affordable housing, down from 35% under current policy. This new planning route, which will be time-limited to two years, will also enable social housing grant to be used on half of the 20% affordable housing.
https://www.london.gov.uk/mayor-welcomes-biggest-ever-funding-settlement-affordable-housebuilding-capital-huge-win-londoners - London City Hall reports that the Mayor of London, Sadiq Khan, has welcomed the biggest and longest funding settlement for affordable and social housebuilding in the capital. London is set to receive £11.7 billion over the next ten years, up to 30% of the Government’s new £39 billion Affordable Homes Programme, to support social and affordable housebuilding. This funding will enable the Mayor to build on his housing record, which includes the highest level of council housebuilding in London since the 1970s and record overall housing completions since the 1930s.
https://www.standard.co.uk/news/london/sadiq-khan-council-houses-affordable-housing-40-000-city-hall-b1240943.html - The Standard reports that London Mayor Sadiq Khan has launched a £3.5 billion housebuilding programme, with a particular focus on social and affordable homes. The plan includes building 40,000 new council homes by 2030 and establishing a new interventionist City Hall developer. This initiative aims to address the significant challenges in providing the number of homes needed in London, with the city needing to start 87,992 new homes annually from 2026, according to the Government.

Noah Fact Check Pro

The draft above was created using the information available at the time the story first emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed below. The results are intended to help you assess the credibility of the piece and highlight any areas that may warrant further investigation.

Freshness check

Score: 8

Notes: The narrative presents a recent policy change regarding affordable housing requirements in London, with no evidence of prior publication. The earliest known publication date of similar content is 23 October 2025. The report is based on a press release, which typically warrants a high freshness score. No discrepancies in figures, dates, or quotes were found. The content appears original and exclusive. No recycled or republished material was identified.

Quotes check

Score: 10

Notes: No direct quotes were identified in the narrative, indicating a high level of originality.

Source reliability

Score: 9

Notes: The narrative originates from Building Design Online, a reputable organisation known for its coverage of the construction and design industry. The report cites official government press releases, enhancing its credibility.

Plausability check

Score: 9

Notes: The claims made in the narrative align with recent government initiatives aimed at addressing London's housing crisis. The policy changes described are consistent with the government's broader strategy to increase affordable housing supply. The language and tone are appropriate for the subject matter and region. No excessive or off-topic details are present.

Overall assessment

Verdict (FAIL, OPEN, PASS): PASS

Confidence (LOW, MEDIUM, HIGH): HIGH

Summary: The narrative presents a recent and original report on a significant policy change regarding affordable housing requirements in London. The content is based on official government press releases, enhancing its credibility. No discrepancies or signs of disinformation were identified. The claims are plausible and consistent with the government's housing strategy. The absence of direct quotes suggests a high level of originality.

Housing
London
Regulation