London Mayor Reduces Affordable Housing Target to Boost Housebuilding

Strategic Insights -

London Mayor Sir Sadiq Khan has reduced the required percentage of affordable housing in new developments to 20 per cent, a move aimed at kick-starting London's housebuilding sector. This change comes after the mayor and Housing Secretary Steve Reed announced the measure, citing the need to address the capital's slowing housebuilding rate. The new target, down from 35 per cent, is seen as a significant concession to developers who have been struggling with high costs and profitability issues. This move is expected to help unlock stalled sites and accelerate the delivery of new homes in London.

Key Takeaways:

  • The affordable housing target has been reduced from 35 per cent to 20 per cent to incentivize developers to build more homes in London.
  • Developers will see 50 per cent of their community infrastructure levy written off if they hit the 20 per cent mark.
  • The change is aimed at addressing the slow rate of housebuilding in London, which is currently building houses at the slowest rate in the UK.
  • The measure is part of a package of reforms aimed at speeding up the planning process and reducing costs for developers.
  • The Building Safety Regulator has agreed to speed up its application process for new high-rise buildings.
  • Mark Allan, chief executive of Landsec, said the move would "go a long way to unlock delivery on stalled sites and accelerate delivery on others, ensuring thousands more homes".

Statistics:

  • 20 per cent: the new target for affordable housing in new developments.
  • 35 per cent: the previous target for affordable housing, which has been reduced.
  • 50 per cent: the amount of community infrastructure levy that will be written off for developers who hit the 20 per cent mark.
  • 2 years: the length of time the new powers will last.
  • Thousands: the estimated number of additional homes that could be built, according to Mark Allan of Landsec.

Sources:

  • David Robinson, "London Mayor Announces Measures to Boost Housebuilding", _Financial Times_, no date (provided in the original text).
  • Not mentioned in the original text.