The green belt is just one of many challenges delaying housebuilding in London

We estimate building on the 35,000 ha of green belt land within the capital’s border could deliver close to half a million homes. The boroughs of Bromley, Havering, Hillingdon and Enfield have the combined potential to provide nearly 220,000 new homes if green-belt development is permitted.

In London, a significant number of such sites are ripe for development, with many also close to existing transport infrastructure. And some sites have been developed: around 3,000 homes in London have been built on the green belt over the past decade, with a further 2,000 in the pipeline.

“The reality is that London’s house builders are facing significant obstacles at every stage of the development process, hindering delivery of housing”

However, historically, this has only been granted in exceptional circumstances and has not been the norm.

Unlocking the green belt is a positive step, but the issues go much further than land availability. The reality is that London’s house builders are facing significant obstacles at every stage of the development process, hindering delivery of housing.

New figures from research firm Molior point to a drastic decline in housebuilding. In Q1 2025, only 1,210 new homes were started in London, with 23 boroughs recording zero new housebuilding starts. This is the lowest quarterly rate of housebuilding recorded since Q1 2009, in the midst of the financial crisis

Our own analysis of each London borough’s performance versus the targets set out for them in the 2021 London Plan found a shortfall of 50,000 homes across the capital. All but four boroughs have fallen short of their agreed targets.

Westminster is the best-performing borough, having built 1,000 homes more than its target. Greenwich is at the other end of the scale, with a current shortfall of over 5,000 homes.

Many brownfield sites that could deliver thousands of homes are either stuck in the planning process, or construction starts are held up by lengthy administrative delays in obtaining sign-off from the Building Safety Regulator.

“Many brownfield sites that could deliver thousands of homes are either stuck in the planning process, or construction starts are held up by lengthy administrative delays in obtaining sign-off from the Building Safety Regulator”

Alongside these delays, there has been a slow sales market and also a loss in value from the affordable housing sector, as providers of affordable homes struggle with less grant availability and managing their ageing housing stock. Added to this, there has been rampant build-cost inflation over recent years.

A recent report from the Centre for London thinktank found that the upfront cost of constructing 88,000 new homes a year (the government’s annual target for the capital) is over 40 times higher than the same target for the West Midlands.

Developers are struggling to build in the current climate. In fact, the construction industry has recorded the highest rate of insolvencies across all industries. The industry is also facing a shortage of skilled workers.

Compounding the problem, the sector is subject to heavy tax burdens, such as the Community Infrastructure Levy and the pending Building Safety Levy.

The net result is that the financial viability of many sites is severely challenged. While large house builders and developers with strong balance sheets are better placed to weather this, there has been a significant reduction in small and medium-sized enterprises, which are vital in delivering smaller development projects.  

The combination of viability challenges and planning and regulatory delays has resulted in a total collapse in supply of new homes across the capital. So while green-belt release is a helpful part of the solution to London’s housing crisis, further significant and urgent steps need to be taken to support the industry.

Scott Cabot, head of residential research, CBRE