London (Parliament Politics Magazine) – London Mayor Sadiq Khan faces pressure to lower housing targets as new homebuilding drops 59%, with developers blaming strict affordability rules.
As reported by The Telegraph, Sadiq Khan faces backlash over strict housing policies amid a sharp decline in London’s new home supply.
What did new figures reveal about London’s housing crisis?
The National House Building Council showed that only 904 new homes were registered in London during the second quarter. That marks a 59% decline compared to the same period in 2024.
Homebuilding in London has fallen to its lowest second-quarter level in 15 years, with fewer than 1,000 new homes registered. A decade ago, that number was nearly 7,000.
The NHBC said the downturn was driven by rising construction costs tied to fire safety repairs in high-rise buildings under new post-Grenfell laws. It also pointed to reduced building activity from housing associations.
Developers have raised worries that Sadiq Khan’s affordable housing demands are deepening the crisis, leading to calls for the mayor to relax the rules.
What’s causing the drop in new home registrations in London?
The Mayor of London scaled back his original target, now requiring private developers to make 35% of homes in each scheme affordable, down from the 50% promised during his campaign.
Developers say the 35% affordable housing target is unrealistic and leaves little room for profit. They say rigid and unrealistic affordable housing rules have halted progress, with many sites abandoned before construction even began.
Homebuilders have also voiced anger over a policy that lets the Mayor claim the bulk of profits from projects falling short of the 35% affordable housing threshold.
Insiders say leading developers are pressuring City Hall to revise the current quota, pushing for a reduction to just 25% affordable homes.
One source added,
“If the Mayor continues to insist on 35pc, he’ll get 35pc of nothing, so surely it’s better to get a lower percentage of something.”
How has Sadiq Khan spent £4bn on affordable homes?
The number of affordable homes started in the capital reached 3,992 last year — the second-lowest figure since 2008. This marked a modest increase from 2023’s all-time low of 2,358.
Sir Sadiq pledged in 2023 to deliver a “golden era” of council housebuilding after receiving a £4bn boost from the then-Conservative government for his housing programme.
Last year’s Budget saw Chancellor Reeves grant an additional £100m to the scheme, followed by a further £60m boost this year.
The Mayor is under scrutiny for the slow pace of delivery, with the shadow housing minister denouncing the progress as “catastrophic.”
Official figures show that only 1,100 homes were started during the first quarter of the year. The number falls well short of the Mayor’s annual target of 88,000 homes.
Sadiq Khan’s housing targets in London
- Annual goal: Khan aims to build 88,000 homes a year, but recent numbers are closer to 35,000.
- Affordable homes plan: His £4.1bn plan targets up to 27,200 affordable homes by 2026. So far, only 13% of that has been built.
- Green belt use: Sadiq Khan wants to build on poor-quality green belt land near transport links to ease housing demand.
- Affordable housing rule: Developers must make 35% of new homes affordable, down from an earlier 50%.
- Delays & criticism: Conservatives say progress is “catastrophic.” Only 1,927 affordable homes were started by mid-2025.
Labour housing target
- Labour’s goal: 1.5 million homes by 2029 (300k yearly).
- Planning fixes: Faster approvals, focus on poor green belt land.
- Slow progress: Only 186k homes built in the first year.
Big hurdles: Not enough workers, local pushback, slow private sector.