London’s Housing Package and the Coming Political Battle
The recently announced package aims to unlock stalled residential schemes in London and gives developers a new route to move quicker.
The Package
In headline terms, schemes delivering at least 20% affordable housing can access a streamlined Time Limited Route, borough CIL relief, and potentially GLA grant for affordable homes above the first 10%.
The final measures include some important changes following consultation. The viability hurdle has been softened; instead of a full-blown viability exercise, a residual appraisal and statutory declaration will be satisfactory to show a scheme is unviable. That should make the route faster and more usable in practice. The requirement for a Late-Stage Review has also been removed.
The package is focused on private residential development on brownfield land. Mixed-use schemes can benefit too, but only on the residential element. There are also specific routes for Build to Rent (30% London Living Rent/Key Worker Living Rent threshold) and some public sector and industrial sites (35% affordable housing threshold). PBSA, co-living, Green Belt, MOL and open space, however, are excluded.
These measures are time-limited, and the political window may prove tighter than the policy one. Applications need to be validated by the Council by 31 March 2028, and construction must begin by 31 March 2030. For developers with stalled London schemes, the message is simple: move quickly (before the next general election please)!
The real story here is political.
The Government and the GLA have, in the end, agreed a significant package that could make a real difference. Getting to this position was not easy. Labour understands there is a serious housing crisis and now realises that the London market is broken, and that the pre-Truss environment isn’t coming back. It has set itself a national target of 1.5m homes that it knows it can’t meet and has effectively conceded that something had to give in the capital.
This is difficult territory for Labour.
Labour voters, activists and councillors want more housing, but they don’t necessarily agree with the way housing is currently delivered through the market. Many view it as an affordability problem, rather than a supply one. They are suspicious of private sector ‘profiteering’ and want to see affordable housing and public benefits maximised, and where delivery cannot be led directly by the state (the preferred option of many), they want those outcomes secured through strong requirements on developers.
This is particularly true in London. It has shaped the London Plan and viability approach under Sadiq Khan’s mayoralty (Khan remains very popular within the Labour Party in the Capital). That framework created a politically defensible position that Labour councillors could (mostly) get behind. It is therefore unsurprising that there is reluctance to concede that this model is no longer delivering. Hence the language of “emergency” and “temporary”.
Herein lies the central challenge with this package.
Its success relies on the boroughs ‘playing ball’: facilitating rather than frustrating TLR schemes. In practice, that means councillors being asked to approve schemes with reduced affordable housing and infrastructure contributions. This would be a difficult sell at the best of times.
These are not the best of times.
The measures arrive just before the London Borough elections in May. Elections in which Labour are expected to do very badly. Labour is widely expected to lose seats, and in some cases control to the Greens, Reform, Lib Dems and Tories. The result is likely to be more councils under no overall control, more coalitions, more minority administrations and a much more competitive, fragmented and unstable decision-making environment. This will make controversial planning decisions harder.
The Greens in particular are openly hostile to Labour’s current housing approach. They call for rent controls, council investment in ‘genuinely affordable’ housing and are generally hostile to the existing developer-led model. More broadly, opposition parties across London will see local planning disputes as opportunities to draw political dividing lines with Whitehall and City Hall. With one eye on the Mayoral elections in 2028, there is every incentive to turn development into a battlefield.
The likely result is a more adversarial relationship between boroughs and the GLA, with more schemes becoming political tests of will as much as planning judgments.
That is why the parallel changes to the mayor’s call-in powers matter.
From May, schemes of 50+ homes can be called in where boroughs are minded to refuse, with further powers for 1,000+sqm schemes on Green Belt or MOL. These are not secondary reforms: they are the backstop to the package. The Government is strengthening City Hall’s ability step in when Boroughs don’t cooperate.
If borough resistance hardens after May, City Hall will have to do more of the heavy lifting. This is a test of administrative capacity, political will and resolve. Labour is caught between an electorate that expects development to deliver visible public benefits, and the reality of collapsing housebuilding numbers. Whether the Labour candidate in 2028 is Sidiq Khan or someone else, it’s difficult to see how Labour tells a convincing story Labour about it’s London housing record unless these measures start to produce visible results.
There are, however, reasons to think the GLA will lean in. In Tom Copley and Jules Pipe, senior figures who understand both the scale of the housing crisis and the politics of trying to address it. They have shown willingness to engage with difficult trade-offs in a highly charged environment. We should expect the GLA to become more interventionist, more exposed, and more central to the progress of applications.
Developers will need to adjust.
A policy-compliant planning case will no longer be enough, developers will also need a political strategy: one that is realistic about borough dynamics, credible with the GLA, and honest with councillors and communities about the trade-offs involved. There needs to be much more truth-telling in the debate. Builders cannot build if there are no buyers, developers will not invest if there is no prospect of profits, and unviable schemes deliver no homes and no affordable housing.
That is not an easy case to make, but it is the case that now must be made. (This piece doesn’t even touch on recent events that have hit the sector still further, increasing the need for greater reforms)
The CCP can help
We work at the point where planning, politics and City Hall intersect. We understand how the GLA thinks, where borough resistance is likely to emerge, and how to frame schemes so that they can move through an increasingly difficult political landscape. We also have a strong track record of engaging with the GLA to help unblock schemes when borough politics threatens to stall delivery.
If you are considering bringing forward a TLR scheme or want to understand how the borough / GLA dynamic may affect a live site, please get in touch.