London’s housing delivery in ‘major crisis’ and could collapse without intervention, house builders warn

Planning permissions have also taken a nosedive, dropping to their lowest level since records began in 2006, with just 966 developments approved in the same period.

Meanwhile, the number of new housing developments starting has plummeted by 38%. 

The HBF said that under the government’s standard method, which calculates minimum housing need for each local authority, London needs to deliver 88,000 homes a year.

To meet this, output would need to more than double, which casts “serious doubt” on the city’s ability to make the required contribution to government’s 1.5 million homes target.

Affordable housing delivery in the capital is also in decline. Last week, Tom Copley, deputy London mayor for housing and residential development, was questioned by the London Assembly’s housing committee over the collapse in housing starts.

It was revealed last month that just 979 homes have been completed under London mayor Sadiq Khan’s 2021-26 Affordable Homes Programme – 5.5% of the revised 17,800 target.

At the time, a spokesperson for the mayor said: “The mayor is taking the hard decisions to improve housing supply of all tenures. He is actively exploring releasing parts of London’s green belt for development and is working closely with the government to resolve issues like delays from the Building Safety Regulator.”

The HBF’s report argued that London’s 35% affordable homes target is another “major barrier” to delivery, with few schemes able to meet the threshold.

It also said there is a shortage of registered providers, such as housing associations, willing to take on Section 106 properties. 

A recent Freedom of Information request submitted to local councils by the HBF revealed that 8,500 homes currently under construction or set to start within 12 months do not have a registered provider buyer.

Other factors include the 10,000 homes “stuck” in the Building Safety Regulator’s Gateway 2 process, the second staircase rule, carbon offset charges and the Mayoral Construction Infrastructure Levy.

Neil Jefferson, chief executive of the HBF, said: “The findings of Mind the Gap should be a major wake-up call for government and 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 homeownership in the country.”