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With house-building in the capital at a virtual stand-still, the mayor of London and the government have come together to develop an emergency package of support for developers.

The package, which includes temporary relief from the community infrastructure levy and a reduction in affordable housing allocations, is designed to improve the viability of housing developments in the near term, and get building projects moving.

The measures are:

• temporarily reducing the percentage of affordable homes that a project should provide, from 35% to 20%
• a temporary relief from the community infrastructure levy (CIL), including 50% of borough CIL relief available for qualifying schemes that commit to delivering at least 20% affordable housing in line with the new time-limited planning route, and additional relief available at higher levels of affordable housing
• the removal of elements of guidance that can constrain density, including standards relating to dual aspect and units around the core, and amendments to cycle storage requirements
• a time-limited planning route, enabling developers to secure planning permission without a viability assessment on private land where they commit to 20% affordable housing, of which half will be eligible to receive grant funding, with a gain-share mechanism to increase affordable delivery on sites that continue into the next decade where market conditions improve
• new powers for the mayor of London to review and call in applications of schemes of over 50 homes where a borough is minded to refuse, and to call in development proposed on the green belt and metropolitan open land, with the intention of supporting additional delivery – as well as powers to streamline the mayor’s decision making on called in applications, and to make mayoral development orders for strategic schemes without the need for borough consent
• funding to establish a City Hall Developer Investment Fund – with an initial allocation of £322m of grant investment to help the mayor unlock and accelerate housing delivery.

The Greater London Assembly will consult on the terms of the new time limited planning route over six weeks from November, with the aim of having guidance in place at the earliest opportunity. The new time limited planning route will be open until 31^st March 2028, or the publication of the new London Plan, whichever is sooner.  

Housing secretary Steve Reed said:  “Getting spades in the ground in London is crucial if we want to see the biggest increase in social and affordable housing and meet our target of delivering 1.5 million homes in our Plan for Change.  

“I have worked closely with the mayor of London to give the capital the shot-in-the-arm it needs to ensure more Londoners have an affordable home of their own.” 

Mayor of London Sadiq Khan said: “Affordable housing has always been a top priority for me as mayor. We have started more new council homes in London than at any time since the 1970s and, prior to the pandemic, completed more new homes in London than any time since the 1930s. But there’s now a perfect storm facing housebuilding in London due to a combination of high interest rates, the rising cost of construction materials, the impact of the pandemic and ongoing consequences of Brexit. All of this means we are now in the midst of the most difficult period for housebuilding since the global financial crash. 

“Urgent action is required, which is why I’ve been working with the government on this package of bold measures. I grew up in a council house, so I know the importance of social and affordable homes. I’m not willing to stand by while the supply of affordable housing for Londoners dries up.”    

John Dickie, chief executive at London lobby group BusinessLDN, said: “With housing starts, planning applications and house sales at historic lows in the capital, the government and mayor are right to take action to accelerate delivery of the new homes that Londoners desperately need.

“As house-building costs have spiralled in recent years, construction has faltered. This is hitting London’s competitiveness by making it harder for employers to recruit and retain staff, while also forcing boroughs to collectively spend £5.5m a day on temporary accommodation to tackle homelessness.

“Temporarily adjusting the percentage of affordable homes that a project should provide and offering time-limited relief on developer contributions to local infrastructure payments are welcome and these changes, along with greater flexibility on design standards and enhanced planning powers for the mayor, will help to get more shovels in the ground.

“To build momentum the government needs to double down on reforms to speed up the Building Safety Regulator’s approvals process and stand ready – with the mayor – to intervene if supply doesn’t respond and further action is needed action to kick start development and support economic growth.”

British Property Federation policy director Danny Pinder said: “We have been raising the issue of viability – or lack thereof – for some time and it’s good to see the mayor and government recognise this. Housing delivery has been brought to a standstill in London and a more pragmatic approach to affordable housing delivery is essential to start unlocking development.

“As we have long made clear, viability is a huge problem for the sector and this crisis is driven by a myriad of factors across the tax and regulatory landscape. One thing that today’s announcement won’t solve which is particularly affecting London are the delays at the Building Safety Regulator, where 55,000 homes are stuck waiting for sign off for construction or remediation, half of which are in the capital. Today’s announcement is a positive step in recognising and reacting to the current viability crisis and we look forward to engaging with the forthcoming consultation on the underpinning detail.

“We hope that the chancellor uses the upcoming budget to take further steps to improve the viability landscape as set out in our budget submission in order to make today’s otherwise welcome package meaningful in practice.”

Solicitor Matthew Evans, a partner in law firm Forsters’ planning team, said: “The requirement for London councils to secure 35% affordable on new home schemes has been stifling development and is reflected in start on site statistics, which most recently show that only 731 market homes were started in London in Q2 2025. Proposals to introduce a lower requirement at 20% may unlock some development, but in many cases this requirement will still be too high to change viability challenges which developers are grappling with in the capital. Top-down affordable housing requirements fail to consider local context and land values, there would be greater benefit in introducing more flexibility in affordable housing requirements borough by borough. It remains to be seen whether cutting affordable housing requirements to 20% London wide will stimulate the housing market and start to make a real difference to supply.  The speed of the consultation and implementation through ‘emergency’ London Plan Guidance is very welcome – rather than wait for the London Plan process to run its course, the government has shown willingness to grasp the nettle now.  Temporary relief from CIL will also be widely welcomed across the industry, though with that being implemented through secondary legislation, that change may take a little more time to come into effect.”

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