Labour Government Slashes London's Affordable Housing Target Amidst Council's Shambolic Performance

Strategic Insights -

As the Labour government agrees to lower Sir Sadiq Khan's affordable housing starts target by 22%, it marks the second instance in two years that ministers have intervened to reduce the target. The Mayoral target, initially set at 35,000 affordable homes by March 2026, has been slashed to between 17,800 and 19,000 homes, according to reports.

Labour government's decision to lower the affordable housing target follows last year's record low in affordable home starts, with construction beginning on only 2,358 homes. While there was an improvement in the subsequent year, with 3,991 homes commencing construction, it remains significantly below average. The reduction in target has received severe criticism from City Hall Conservatives, who have described the Mayor's performance as "shambolic."

Key Takeaways:

  • The Labour government has agreed to lower Sir Sadiq Khan's affordable housing starts target by 22%, from 35,000 to between 17,800 and 19,000 homes by March 2026.
  • The reduction in target is the second instance in two years that ministers have intervened to lower the target, with the previous Conservative government cuts the goal to between 23,900 and 27,200 homes in 2023.
  • The Mayor's affordable homes programme, which began in 2021 and runs until 2026, has resulted in the commencement of construction on 5,188 homes, with the new target meaning the Mayor is now just under a third of the way to reaching his 2026 objective.
  • Sir Sadiq has set an overall target to build 88,000 homes a year in London, although existing plans only deliver around 40,000, with the Mayor required to start work on 12,612 affordable homes in less than 12 months.
  • The decision to reduce the target has been criticized by City Hall Conservatives, who have accused the Mayor of being "nowhere near" where he should be in terms of housebuilding, with Susan Hall describing the Mayor's record as "atrocious."
  • Deputy Mayor Tom Copley has blamed the "horrendous legacy of the last government" for making it harder to build homes, including "a lack of national funding, high interest rates, spiralling building costs, delays from bodies like the Building Safety Regulator and the lasting impact of Brexit."
  • The Ministry of Housing, Communities and Local Government has stated that they expect the Mayor to take all possible steps to build thousands more affordable homes that Londoners desperately need, citing a willingness to deliver the "biggest boost to social and affordable housing in a generation."

Statistics:

  • 22% reduction in affordable housing starts target
  • 35,000 initial target for affordable homes by March 2026
  • 17,800 to 19,000 revised target for affordable homes by March 2026
  • 5,188 homes commenced construction under Sir Sadiq's affordable homes programme
  • 12,612 affordable homes required to be commenced construction in less than 12 months to meet the revised target
  • 3,991 affordable homes commenced construction in the 12 months ending March 2025
  • 2,358 affordable homes commenced construction in the previous year
  • 40,000 homes delivered under the Mayor's existing plans
  • 88,000 homes target for annual delivery in London

Sources:

  • [1] PA Images /Alamy
  • [2] Peter Nicholls/Getty Images
  • [3] Ministry of Housing, Communities and Local Government statement
  • [4] Susan Hall's comments as reported in an article