Affordable housing quota for London falls to 20%

"Back in 2016, the Mayor of London Sir Sadiq Khan said that London needs to build about 66,000 new homes per year to meet demand, with more than 50% of those should be affordable. In 2017, he doubled down to introduce a fast-track route for major developments if they provided at least 35% affordable housing. The Home Builders Federation reported that only 30,000 residential properties last year were built, with the government expecting 88,000 from the capital per year to meet the city's housing needs."

"In a release, City Hall said that the scale of the housing crisis in recent years means "emergency action is needed to get building moving". The government said that a "perfect storm due to a combination of spiralling construction costs, high interest rates, the legacy of the previous government, impact of the Covid-19 pandemic, regulatory blockers and wider economic conditions," had created an urgent need for more housing."

The government and the mayor of London have agreed to reduce the affordable-housing quota for new developments from 35% to 20% to accelerate planning decisions and incentivise developers. Developers who offer 20% affordable housing will receive a fast-tracked application route. The mayor has been granted expanded planning powers and funding, including intervention rights for applications of more than 50 homes previously rejected by boroughs and a £322m City Hall Developer Investment Fund. Previous targets called for about 66,000 new homes annually with over 50% affordable, but recent delivery has fallen short, with 25,000 affordable homes in 2022-23 and under 4,000 last year.

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