Government and mayor announce ‘targeted refinements’ in final version of London’s emergency housebuilding package

The housing secretary and mayor of London have confirmed emergency measures to stimulate housebuilding in the capital.

Policies to address London’s idling housebuilding market were initially set out inOctober, after which a public consultation was formally launched.

In its response to the consultation, published today, the government set out the finalised package of targeted and time-limited measures.

These include a new fast-track planning route for sites delivering at least 20% affordable housing, down from 35% under existing policy.

The government will also institute temporary relief from the Community Infrastructure Levy (CIL) for such schemes, with additional relief for those going further on affordable provision.

The package will also see the removal of Greater London Authority guidance that constrains density where this is holding and delivery of more homes on land earmarked for development. 

This includes a less ‘rigid application’ of the dual aspect requirement’ and a loosening of guidance intended to limit the number of dwellings per building core, which might be a staircase or elevator shaft.

Legislation has been brought forward, coinciding with the announcement, that expands the mayor’s powers to call in and review planning applications for 50 homes or more where a borough is minded to refuse. This will come into force in May.

The government said the public consultation had led to “targeted refinements” in order to “maximise the number of schemes that can benefit from the emergency measures”.

These include an adjustment to the time limited planning route. The deadline for schemes passing through this route to commence has been amended to 31 March 2030, after feedback that the initially proposed deadline of 31 December 2028 was too restrictive.

The window for submission has also been extended to allow validated applications submitted before 31 March 2028, by which time the new London Plan is expected to have been adopted and a new viability assessed threshold in place.

The original proposals included a late-stage gain-share mechanism, to increase affordable delivery on sites that are not completed by March 2030 and where market conditions have improved. This has been replaced by an early stage review, with no further reviews beyond this. 

The early stage review will be triggered where an agreed build out milestone is not met within a stipulated time period, with the default being a first-floor slab achieved within 30 months of the grant of planning permission. However, there will be flexibility for boroughs to agree to different definitions and time periods.

Regarding CIL relief, the government has watered down requirements for viability evidence, deciding that it is sufficient for developers to “demonstrate through a residual appraisal that they are unviable currently – rather than evidence that the CIL relief is demonstrably necessary to make the development viable”.

The commencement deadline has also been amended to 31 March 2030.

A policy note makes clear that all of the measures apply to existing consents that are now unviable, not just future consents, something that was not explicitly stated in October’s announcement.

The immediate sector response to the announcement has been almost uniformly warm, though many noted that the measures only offered a partial fix. 

Craig Carson, regional managing director of Barratt London, welcomed the “focus on accelerating delivery” and hailed the measures as “pragmatic” while calling on the government to introduce support for buyers to access new homes.

Olivia Harris, chief executive, Dolphin Living, said there was “much to welcome” in the updated measures, pointing to “the more flexible approach to CIL through the introduction of the lighter touch Summary Appraisal, along with an extension of the time limited planning route to benefit from the lower affordable housing rate of 20% until March 2028”.

However, she said that in addition to the package, London boroughs and the GLA needed to offer “far greater flexibility with regards to affordable tenure”, urging a switch to intermediate rented tenure, a sub-market rent level that Dolphin itself provides.

John Dickie, chief executive of business advocacy group BusinessLDN, said it was good that the government mayor had “listened and acted”, while noting that part of the package would “only be in place later this summer due to the need for further consultation”.

“This underlines the need for more flexible regulatory models that can deliver change with swift due process rather than taking over a year from first announcement to first approval,” he added.

Dickie also called on the government to pause and review the introduction of the Building Safety Levy.

Nicholle Kingsley, partner for planning and real estate at law firm Mishcon de Reya, said the package was “positive and pragmatic”, noting in particular that “the ability for existing consents to benefit, alongside a reduced CIL liability, should make a difference at the margins”.

However she noted concern in the market that the interventions were too “temporary and limited in nature”.

“With a 2028 application deadline and delivery milestones built in, there is a risk they won’t fully align with market realities while values remain subdued and costs and levies continue to rise,” she said.

Victoria Du Croz, head of planning at law firm Forsters, said the measures “are failing to go far enough”, explaining that while a 20% affordable figure “may be enough to kick-start some schemes”, it was “unlikely to be sufficient to make a material difference on the ground”

“Affordable housing is a huge barrier to housing supply and top-down figures fail to consider local context, land values and fluctuating build cost inflation,” she said. 

“Given the quick implementation of these measures, which is welcome, it will quickly become clear how effective the changes have been to getting spades in the ground and homes of all tenures built.”