A much-anticipated package of policy measures intended to revive London’s struggling housebuilding sector has been postponed until at least the end of October, sources reveal. The government and the Greater London Authority (GLA) have been in protracted discussions concerning short-term interventions designed to ease housing delivery under current economic pressures.

The awaited announcement, initially expected mid-October, reportedly includes a reduction in affordable housing requirements from 35% on private sites and 50% on public sites to around 20%, alongside possible adjustments to design standards. However, disagreements between the Ministry of Housing, Communities and Local Government (MHCLG) and the GLA over the political implications, procedural details, and the specifics of the package have delayed the move. The government is keen to issue the statement before the Office for Budget Responsibility publishes its economic growth forecasts alongside the budget on 26 November.

This deferment comes amid growing concerns from the Home Builders Federation (HBF), whose recent reports describe London’s housing delivery as being in “major crisis.” The capital experienced a 12% drop in completed homes in the year leading to June 2025, with only 30,000 new homes finished—a decline that threatens London’s contribution towards the government’s target of 1.5 million new homes nationwide by 2030. The HBF attributes this downturn to lengthy planning delays, high construction costs, complicated policies—including the London Plan’s 88 additional policies—and delays linked to the Building Safety Regulator’s stringent safety requirements.

Specific challenges related to affordable housing obligations have also been cited. Currently, London sites are expected to deliver 35% affordable housing for private developments and up to 50% on public land, targets which many developers find increasingly unviable amidst rising costs and a subdued market. The HBF’s research highlights that such high thresholds, coupled with complex tenure mix demands, are stifling progress, advocating for greater policy flexibility that reflects current economic realities.

Further compounding delivery issues, the HBF has highlighted that approximately 8,500 affordable homes face being left unoccupied due to social housing providers hesitating to take on new Section 106 contracts, resulting in an estimated 700 housing developments being stalled. This bottleneck undermines national housing goals and reinforces calls for urgent government intervention to reinvigorate the housing market.

The Mayor of London, Sadiq Khan, acknowledges the difficulties facing the sector as a “disastrous inheritance” from previous administrations, compounded by soaring construction costs and economic pressures. In response, the Mayor has committed to bold measures, including exploring development on the green belt and launching a £100 million Housing Kickstart Fund. This fund aims to convert stalled market-rate homes into genuinely affordable homes for rent and purchase, accelerating delivery across the capital to address the persistent shortfall.

MHCLG has not yet provided comment on the delay or the forthcoming policy package, while the Mayor’s office emphasises a collaborative approach with the government to support the ambition of “getting Britain building again,” despite the lingering challenges inherited by the capital’s housing system.

With London facing a critical juncture in housing delivery—hampered by policy complexity, financial pressures, and procedural delays—the eventual implementation of the emergency package is widely expected to be a vital step towards revitalising the city’s housing market. Yet, the delay underscores the political and operational challenges involved in balancing ambitious housing targets with practical deliverability in one of the world’s most complex urban markets.

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Source: Noah Wire Services