London council drops two affordable housing projects, citing government’s rent convergence decision

The government announced its long-awaited rent convergence policy on 28 January, setting out plans for phased approach with levels initially set at £1 from next April, before rising to £2 the year after.

The sector had been pushing for the policy to come into force from this April, and the Local Government Association warned the phasing of its implementation may impact the delivery of some new homes in the short term.

A spokesperson for Westminster City Council said: “Following the government’s announcement on 28 January 2026 regarding the long-awaited rent convergence policy, the council has reviewed the implications on its HRA and adjusted the rate existing rents can be levelised at, including the impact of additional phasing in the first three years, in line with the announcement.

“As a result, there is not capacity within the council’s HRA to fund new housing development sites at the current time.

“Therefore, the two [sites] comprising Mayne and Brunswick & Dalkeith have not been recommended to proceed.”

Four sites, called Housing Opportunity Locations, will be progressed subject to approval by cabinet, alongside a spend of £5.4m to work up design proposals.

These include a detached building in Queen’s Park currently home to the Queen’s Park Children’s Centre, and an open space in Pimlico, which is currently let as play space to a private school.

The other sites include two residential blocks and a community hub on Brunel Estate in Westbourne, and the Queen Mother Sports Centre close to Victoria Station. 

The six sites were chosen by Westminster in 2024 following a review of underused council assets that could be developed to provide more affordable housing.

Last year, the council appointed consultants to explore each location and draw up a Strategic Outline Case for each site. 

According to the report, these studies had shown a “clear case for change”, responded positively to housing need and identified preferred directions of travel that best aligned with the council’s Fairer Westminster Strategy.

In addition to approving the allocation of £5.4m, the report recommends ringfencing any additional Affordable Housing Fund receipts received in the next two financial years above the budgeted allocation to one of the Housing Opportunity Locations, to help maximise the number of new affordable homes on these sites.