London’s new housing policy, what does this mean for your sites?
A breakdown of the Government and GLA’s new planning reforms — what’s changing, what’s missing, and what London developers should do next.
A week and a bit ago, the Government and GLA announced proposals to get London building again. Like everyone else, we’re asking, will it work, and what should you do if you’ve got a site in London, whatever stage you’re at. Unavoidably in answer those questions, we need to talk about both the policy and the politics.
On 23 October, after months of negotiation between City Hall and Whitehall, a new package of emergency measures was unveiled to address London’s collapsing housebuilding numbers. The key measures are:
Affordable Housing - Reducing the FastTrack threshold from 35% to 20% with grant funding for up to 50% of the affordable homes. A 60/40 split between Social Rent and Intermediate tenures, and a higher benchmark rate for a social rent home at £220,000.
Design and Density - Relaxation of London Plan requirements restricting density on dual aspect, cycle storage and the 8 homes per core limit.
CIL Relief - Temporary relief (until March 2028) from 50% of Borough CIL, though not GLA CIL.
New Mayoral Powers - New powers for the mayor to call in schemes over 50 homes, on Green Belt and MOL, and to determine schemes via written representations.
Funding - A new £322m City Hall Developer Investment Fund to unlock stalled sites.
The announcement has been cautiously welcomed, and credit goes to Steve Reed for demonstrating more commercial understanding and pragmatism than his predecessor. Attention has also, however, turned quickly to what isn’t included.
What’s missing?
Late-Stage Review and Viability reform. Despite being widely understood by the market as the cause of capital flight from London, late stage review of viability remains for housing schemes. Despite previously signalling the possibility of reform in this area, they have not done so and this will impact many schemes.
Nothing in the package for Co-Living, Student Accommodation or Registered Providers. Co-Living and PBSA are excluded from the emergency package: It’s homes Labour wants, and these tenures don’t fit the bill. It’s clear the package is designed to incentivise the market back towards traditional C3 housing. There’s also nothing for RPs, despite over 8,000 homes being held up by their inability to purchase S106 affordable housing – perhaps because it’s viewed as a funding, not a policy, problem.
Demand side measures. No movement on Stamp Duty or first-time buyer incentives. Tax disincentives on second home, buy-to-let, and off plan investors remain outside the scope of current thinking and look set to remain so. Demand remains weak: low chance of stimulus measures in the budget.
What does this mean?
The measures will improve viability and certain on many schemes, but the narrow time frames and political complexity introduce new risk.
These reforms don’t change the wider market fundamentals: high build costs, flat sales values, and fragile confidence in the UK economy. Many developers rightly remain concerned that they can’t sell what they build. The viability crisis runs deeper than these reforms address. This is a course correction, not a miracle cure. More schemes will become viable, but there won’t be a big bang of new activity.
The timeframes are tight; implementation will take time – a six-week consultation followed by statutory instruments and new guidance to follow. Much depends on the goodwill of Boroughs and the GLA to move fast and planning teams remain under resourced. Will the Government extend the timeframes if the system doesn’t move fast enough?
The Politics
Why isn’t the package bigger and bolder?
City Hall has long insisted the London’s slowdown is the result of temporary market conditions, the policies of the Conservative Party and the Building Safety Regulator, not its own London Plan. The penny finally dropped and Whitehall, worried about its 1.5m homes target, growth agenda and narrowing fiscal headroom, was compelled to force the issue.
The result is a temporary compromise, after months of wrangling, that saves political face while nudging policy towards reality. Official documents blame “the Covid-19 pandemic, high interest rates, spiralling construction costs, regulatory blockers and wider economic conditions”. No mention of the GLA’s own planning framework, which remains largely unchanged.
Despite being announced as temporary, these reforms may well be here to stay. They reflect an acknowledgement of the market’s new reality. For now, the expiry date is there to spur action before the next General Election.
Meanwhile, London Labour faces its own May 2026 elections, which could be brutal. These reforms are unpalatable politics and arrive just in time to make Labour’s challenge even harder. Expect opposition parties to attack from all sides. Labour councillors will feel aggrieved: for years affordable housing has been the politically defensible justification for Labour council’s championing development. Expect plenty of rhetoric about Labour selling out to “greedy developers”. Few Labour councillors will rush to defend it.
What to do?
If you’ve got a London scheme, should you re-run the numbers and wait, or press ahead? Complete your s106 or start again? For existing consents, Government suggests Deeds of Variation as the preferred route (over s73). Timing will be critical.
Our advice: use the next few months strategically. Engage early with officers and councillors, understand how they’re interpreting the changes, and build relationships to navigate the new framework.
At CCP, our team can help you assess risks, design the right strategy, and get your scheme moving while others wait months or years for the dust to settle.
Don’t delay, time is of the essence.