The Mayor of London must slash affordable housing requirements and release swathes of green belt land to solve the capital’s housing crisis, a new report has urged.
By Kumail Jaffer, Local Democracy Reporter
The Mayor of London must 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 the majority of private sector developers, said lengthy planning delays stemming from the Mayor’s London Plan and the setup of the Building Safety Regulator (BSR) were also key in the city’s housing dearth.
They noted that while London was expected to deliver 440,000 of the Government’s 1.5 million new homes target by 2030, only 30,000 were completed in the first six months of 2025.
City Hall has come under fire in recent weeks after data showed that London could struggle to meet its targets, both on affordable housing and building homes in general.
In the 2023/24 financial year, the number of new homes delivered in London fell by nine per cent against the previous year, compared to a five per cent decline in the rest of England. A decade ago, London accounted for a fifth of all new homes delivered in England, compared to just 15 per cent today.
The HBF says there is a perfect storm of issues that affect London, including low demand from struggling first-time buyers, planning delays and the BSR. The latter has also faced heavy criticism from the Mayor’s office.
The Mayor’s London Plan, which the HBF says is too complex and puts off developers, has also been blamed. The authors of the Mind the Gap report said: “The policy landscape facing developers in London is more complex and unwieldy than anywhere else in the country.
“This has had the effect of suppressing development, either by further challenging viability and deterring new developments from coming forward, or because navigating the additional policies causes delays to work beginning on site.”
The HBF recommends that 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 Alliance, which advocates for planning reform to unlock the building of more homes, told the LDRS: “With just 731 market homes started in London in Q2 2025, it’s clear we need to find ways to get homebuilding going again.
“There are many options, including revisiting London Plan rules like the expensive dual-aspect requirement and the arbitrary cap of eight homes per staircase or lift core, which substantially reduce the number of homes a given brownfield site can deliver, and which make some sites unviable. Fixing those rules would deliver more desperately needed new homes.”
The HBF report also, controversially, says that London’s current requirement for new developments to have 35 per cent of units qualify as affordable housing is too high.
“While the policy is well-intentioned, in practice, it is a major barrier to delivery and contributes to a situation in which few homes of any tenure are being delivered,” the authors wrote. It recommends the new requirement should only be 25 per cent.
In May, Sir Sadiq announced that City Hall were looking into releasing some parts of London’s green belt for development. Noting that such land can often be “low quality, poorly maintained and rarely enjoyed by Londoners”, he added: “I believe the status quo is wrong, out-of-date and simply unsustainable.
“Development on carefully chosen parts of the green belt – done in the right way – would allow us to unlock hundreds of thousands of good quality new homes for Londoners.”
His sentiment was echoed by the HBF, who urged City Hall to proceed with the review “as quickly as possible so as to provide certainty and not to delay borough-level plan production”.
The report also calls on ministers to cancel the introduction of the Building Safety Levy, scheduled to come into force in 2026 and 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 Home Builders Federation, 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. London Plan policies combined with additional government taxes on new homes, onerous processes to get higher-rise schemes approved and challenging market conditions have effectively made London a no-go zone for housing investment.
“Intervention is desperately needed to support first-time buyers, with Londoners facing the biggest barriers to home ownership in the country. If Government is to stand a chance at making its aspirational 1.5 million homes target a reality, ministers must prioritise action to reverse the alarming decline in housing delivery across the capital.”
A spokesperson for the Mayor of London told the LDRS: “The disastrous inheritance from the previous Government has left national housebuilding on its knees. The Mayor is doing everything in his power to deliver more homes of all tenures, taking hard decisions including actively exploring development on the green belt.
“While the impact of this legacy is being felt acutely in London due to rising construction costs, wider economic pressures and delays from the Building Safety Regulator, the Mayor is determined to work hand-in-hand with the Government to support their ambition to get Britain building again.
“We are making significant progress, including a record £11.7 billion investment into social and affordable housing, new leadership at the Building Safety Regulator and backing for a new City Hall Developer Investment Fund.
“The Mayor is proud of his housing record in London, which includes completing more new homes of all tenures than any time since the 1930s prior to the pandemic, tens of thousands of genuinely affordable homes across the capital, and more new council homes started than any time since the 1970s.”
