Cut affordable home rules to boost London’s housing, report urges

The mayor of London should slash affordable housing requirements and release swathes of green belt land to solve the capital’s housing crisis, a new report has urged.

The Home Builders Federation (HBF), a trade body representing private sector developers, said the London Plan and a new building regulator cause delays.

It noted that London was expected to deliver 440,000 of the government’s 1.5 million new homes target by 2030, but only 30,000 were completed in the first six months of 2025.

But a housing campaign group said the proposed change would be to help developers maximise their profits.

Sir Sadiq Khan has come under fire after data showed London could struggle to meet its targets on affordable housing, and on building homes in general.

In the 2023/24 financial year, the number of new homes in London fell by 9% against the previous year, compared to a 5% decline in the rest of England.

The HBF said there is a “perfect storm” of issues that affect London, including low demand from struggling first-time buyers, planning delays and the Building Safety Regulator (BSR), which was established in 2022.

The BSR has also faced heavy criticism from the mayor’s office.

City Hall said the mayor was doing “everything in his power to deliver more homes of all tenures”.

The HBF said the mayor’s London Plan is too complex and puts off developers.

The plan is a key planning document which sets out a framework for how London will develop in the longer-term.

The authors of the Mind the Gap report said the policies facing developers in London is more complex and unwieldy than anywhere else in the country.

The HBF recommended the new London Plan, set to be published in 2027, should reduce the burden on developers by streamlining any additional policies that apply to residential schemes.

John Myers, director at the YIMBY (Yes in my Back Yard) Alliance, told the Local Democracy Reporting Service: “With just 731 market homes started in London in Q2 2025, it’s clear we need to find ways to get homebuilding going again.”

Mr Myers said options included revisiting the London Plan rules.

“The expensive dual-aspect requirement and the arbitrary cap of eight homes per staircase or lift core substantially reduce the number of homes a brownfield site can deliver, and make some sites unviable.”

The HBF report also found the capital’s current requirement for new developments – to have 35% of units qualify as affordable housing – was too high.

It recommended the new requirement should only be 25%.

The report also called on ministers to cancel the introduction of the Building Safety Levy, scheduled to come into force in 2026, which requires developers to pay for the remediation of any defects, and to implement a new targeted home ownership scheme to help first time buyers.

Neil Jefferson, chief executive of the HBF, said the findings of Mind the Gap should be “a major wake-up call” for government and the mayor of London.

“The capital needs an urgent overhaul of housing policy if it is to support the housing needs of Londoners.”

However, Suzanne Muna, from the Social Housing Action Campaign (Shac) argued the desire to cut the number of [affordable] homes built on new estates “had far more to do with greed than with concerns over the complexity of planning”.

She said regulations were “there for a reason” after incidents like the Grenfell fire, and should be maintained.

A City Hall spokesperson told the LDRS: “The disastrous inheritance from the previous government has left national housebuilding on its knees.”

They said Sir Sadiq was “taking hard decisions” including exploring the development of green belt land.