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14/7/25 8:13 pm
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Will London’s 20% affordable fast-track unlock housebuilding?
London’s housebuilding slump is real and acute. Completions have fallen to roughly 30,000 homes in the year to June 2025, less than half the 88,000 a year widely cited as the city needs and planning permissions have collapsed to their lowest level since records began, creating a pipeline problem that will bite for years. Boroughs say almost 300,000 homes already have permission but haven’t been built, underlining that viability, regulation and delivery, not just planning approvals, are the choke points.
Against that backdrop, City Hall and the government have launched a time-limited ‘emergency’ package: schemes on private land that commit to at least 20% affordable housing (with 60% of that at social rent) can use a fast-track route. There’s temporary relief from the Community Infrastructure Levy for qualifying projects and the mayor gains new powers to call in schemes of 50+ homes and some green belt decisions. A new £322m City Hall Developer Investment Fund is also being set up. Guidance will be consulted on in November and the route is expected to run until 31 March 2028 (or a new London Plan).
Will it work? It should help unblock some stalled sites by easing the most contentious cost drivers (late-stage viability risk, levy burden, prescriptive design/cycle storage rules) and by speeding decisions where boroughs are minded to refuse. It may also revive build-to-rent schemes that struggled to clear the previous 35% threshold. However, the measures are temporary and conditional, and “use it or lose it” gain-share mechanisms mean developers who sit on consents could be required to fund additional affordable homes, so delivery, not landbanking, becomes the rational choice.
For landlords, don’t expect an immediate surge in supply or a quick easing of rental pressures. Construction starts have been sliding for several years and the Building Safety Regulator process continues to slow high-rise projects; even with policy relief, turning permissions into homes will take time amid higher financing and construction costs. In the near term, scarcity is likely to persist, any softening of rents would more plausibly be a 2027–2028 story if starts pick up in 2026.
Where next? Watch the November consultation and how boroughs interpret the fast-track route, expect a flurry of revised applications targeting the 20% threshold. Keep an eye on whether the £322m fund is deployed to unlock large, complex sites and whether call-ins on 50+ home schemes materially shorten timelines. Above all, judge the package by starts, not statements, unless we see a sustained recovery in permissions and shovels in the ground, London’s rental market will remain structurally tight.
For portfolio resilience while supply remains tight, see our partner guide to protecting your rental investment.
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