London needs homes, and a system that can build them

London’s under-delivery is not down to one failure, but the cumulative effect of policy accretion, higher costs, funding constraints and a planning process that too often behaves like a negotiation without an end point.

Across the capital, large numbers of consented schemes are stalled or slowed. Developers are grappling with a viability squeeze coming from several directions at once: rising construction and finance costs while sales values have not kept pace.

“A 2025 analysis suggests that the average negotiation timeline for legal agreements is well over a year, reflecting staffing gaps and wider complexity”

Concurrently, planning requirements have increased. Much of this is entirely understandable – safe buildings, better environmental performance and quality spaces – but the impact on viability is that many schemes are simply not going ahead.

Furthermore, Section 106 negotiations can take a long time, particularly in under-resourced local authorities. A 2025 analysis suggests that the average negotiation timeline for legal agreements is well over a year, reflecting staffing gaps and wider complexity.

Against that backdrop, it is no surprise that the government and City Hall have introduced emergency measures. The GLA’s Support for Housebuilding consultation aims to unlock stalled delivery by removing the requirement for an upfront viability assessment for schemes on private land which commit to at least 20% affordable housing and meet certain eligibility criteria.

It is an additional and temporary measure on top of the existing fast-track route and has attracted predictable criticism from those who fear it will reduce affordable supply.

That is a serious concern as London’s affordable housing need is acute, but when output falls far below requirements, insisting on the same percentages can result in fewer homes, fewer affordable homes and a growing pipeline of non-starts.

If a time-limited easing of requirements unlocks delivery and restores confidence, it could increase the overall number of affordable homes coming forward over the medium term, even if the proportion dips in the short term.

Schemes which haven’t reached a fixed milestone by 31 March 2030 will be subject to a gain-share review mechanism which will ensure any additional returns if market conditions improve, benefit the community and support affordable housing.

That said, in practice, eligibility may be narrower than it first appears. Per the draft consultation, the route requires a 60/40 split weighted towards social rent versus intermediate tenures. The risk is that, in many cases, this will not make schemes more viable.

“Even if this emergency package is introduced, London faces barriers that do not disappear through ministerial announcements, not least land availability and achievable density”

There are also practical delivery issues to navigate on small and medium-sized schemes, and securing registered providers to take up social rent units in mixed‑tenure blocks can be difficult without grant certainty and clear management arrangements for the long term. As a result, fewer schemes may be eligible for the route.

The key is discipline. Emergency measures should buy time, not become the new normal. They must be paired with a clear plan for what happens next, including stronger long-term funding for affordable housing, otherwise we simply lock in lower expectations.

That plan should also set out clearly how the temporary route will be kept under review. If, in practice, the tenure weighting narrows eligibility and limits overall take‑up, there should be scope to adjust it for a defined period, with transparent monitoring in place.

However, even if this emergency package is introduced, London faces barriers that do not disappear through ministerial announcements, not least land availability and achievable density.

Furthermore, registered providers are under intense pressure. Many have been forced to prioritise investment in existing stock, building safety remediation and decarbonisation. Grants have not always kept pace with cost inflation, and some registered providers have become more cautious about taking on additional units, particularly where long-term management costs are uncertain.

If we want providers to scale up development again, they need a funding settlement that is stable, credible and aligned with the true cost of delivery in London.

National planning reform is moving quickly. The Planning and Infrastructure Act and related changes on strategic planning and land assembly are designed to speed things up and support growth.

This is welcome, but many of the UK-wide changes already exist in London, which has a similar strategic planning structure to that being rolled out elsewhere. 

Faster delivery requires not just the proposals currently being consulted upon but policy clarity, better-resourced planning departments, standardised viability expectations, clearer timetables for decision-making and better transparency. Finally, affordable housing delivery needs a funding plan that matches London’s costs.

Temporary policy flexibilities could potentially unlock stalled schemes, but they cannot replace long-term grant certainty, the ability to use public subsidy effectively and a stronger partnership model with registered providers.

Alister Henderson, partner, Carter Jonas