‘Show how lowering requirements will boost affordable housing overall’ Eshalomi tells government

The chair of a cross-party committee of MPs has called on ministers to demonstrate how the housebuilding support package announced yesterday will increase affordable housing supply in London.

Florence Eshalomi, responding to the announcement yesterday that affordable housing requirements on private sites in the capital will be lowered from 35% to 20%, said “it is a matter of serious concern” that “London’s affordable housing target has effectively been cut.”

Eshalomi, who chairs the housing, communities and local government committee, says: “The government should set out how this temporary reduction will increase the number of affordable units delivered overall.

“As a committee, we will be keen to examine the detail of this announcement, including how the clawback mechanism will operate to ensure developers are kept to their commitments to deliver more affordable homes.”

The government and the Mayor of London yesterday jointly announced a long-awaited package of policy changes in a bid to kickstart housing development in the capital, which has seen starts plummet 87% in the first half of the year.

This new planning “route”, which will be time-limited to two years, will also enable social housing grant to be used on half of the 20% affordable housing. There will, however, be a “gain-share mechanism” to increase affordable delivery on sites that have not been completed by March 2030, where market conditions have improved.

In addition to the changes to affordable housing requirements, the package includes changes to design requirements in a bid to boost densification, a reduction in the Community Infrastructure Levy and changes to the mayor’s call-in powers.

Eshalomi said: ““It’s also important that we build high quality, safe homes for people to live in so we will be particularly keen to understand the implications of the announcements on density guidance in London.”

In other reaction today, Neil Jefferson, chief executive of the Home Builders Federation welcomed the package, saying few sites can currently support 35% affordable housing because of “taxes and policy costs being levied on development.”

He stressed however that “affordable housing levels are not the only reason housing delivery has collapsed”.,

He said: “More widely, London faces an acute affordability challenge, in particular for first-time buyers which limit the ability for builders to invest, and recent delays caused by the problems with the Building Safety Regulator.

“This announcement is very welcome, but much more needs to be done if we are to reverse the decline in development and get anywhere near the quarter of England’s housing supply that London ought to be providing”

Kate Henderson, chief executive of the National Housing Federation, said: “It’s vital that action is taken to address these challenges, and while we don’t want to see affordable housing ambitions watered down, we hope that this temporary and London-specific package of measures gets spades in the ground and is quickly followed by ambitious plans to boost social housebuilding.

“This should include the confirmation of rent convergence, details of social housing funding and low-cost loans.”

In immediate sector reaction yesterday several sector figures said the measures will boost the market in the short-term, but others are doubtful about the impact on affordable housing delivery and its effectiveness in tackling lack of demand.