London has set itself one of the most ambitious housing targets in Europe: 88,000 new homes per year. On paper, this figure reflects the scale of the city’s need. In practice, it stands in sharp contrast to delivery reality.
Over the past decade, London has consistently delivered between 30,000 and 45,000 homes annually. Even in stronger market years, output has never approached the current target. The gap between ambition and execution is no longer marginal, it is structural.
Against this backdrop, the London Assembly’s Budget and Performance Committee meeting on 6 January 2026, scrutinising the GLA and its functional bodies’ housing delivery budgets for 2026–27, is not just a routine governance exercise. It is a rare moment where funding assumptions are tested against delivery evidence.
The Affordable Housing Constraint Is the Real Bottleneck
The GLA’s own assessments have long recognised that London’s housing crisis is fundamentally an affordable housing crisis.
- Identified need: 42,841 affordable homes per year (2016–2041)
- Latest delivery (2023–24): 7,674 net affordable homes
- Achievement rate: approximately 18% of annual need
This is not a short-term dip. It reflects a persistent inability to fund affordable housing at scale within the current system. While total housing numbers fluctuate with market cycles, affordable delivery is constrained by capital grant availability, scheme viability and cross-subsidy limits. Private delivery alone cannot bridge this gap and social housing delivery remains highly sensitive to funding certainty.
The result is a housing pipeline that looks ambitious at plan level but becomes progressively thinner at delivery stage.
Why Budget Scrutiny Matters More Than New Targets
Political housing targets tend to attract attention. Budgets determine outcomes.
The 2026–27 scrutiny session brings together senior figures from:
- The GLA Housing and Land directorate
- The London Legacy Development Corporation (LLDC)
- The Old Oak and Park Royal Development Corporation (OPDC)
- Places for London
This matters because these bodies control:
- Public land release strategies
- Affordable housing grant deployment
- Phasing decisions on long-term regeneration sites
If funding assumptions do not align with construction cost inflation, borrowing constraints and developer risk appetite, delivery simply slips quietly, incrementally and often without headline failure. For the industry, scrutiny meetings like this are one of the few moments where delivery friction becomes visible.
The scrutiny session follows a London Assembly briefing examining how London will fund its housing needs, which sets out the scale of the delivery gap between housing targets, affordable housing requirements and current funding capacity.
What the Numbers Are Really Telling the Market
From a delivery perspective, the current data points to several hard truths:
- The 88,000 homes target is not currently fundable at scale
- Affordable housing delivery is acting as the binding constraint
Regeneration-led schemes are increasingly dependent on:
- Longer phasing
- Reduced affordable proportions
- Deferred infrastructure
This has downstream effects across the supply chain:
- Contractors see lumpier pipelines
- Consultants face extended pre-construction periods
- Developers carry longer planning-to-start risk
None of this stops schemes outright. It simply slows them, which is far harder to track, but far more damaging over time.
The Political Promises vs Delivery Reality Gap
The Mayor’s 2024 manifesto commitments, including:
- 40,000 new council homes by the end of the decade
- Ending rough sleeping by 2030
- Expanded renter protections and new rent control homes
,are politically significant, but delivery remains contingent on funding mechanisms that have not materially changed.
Without:
- Higher sustained grant rates
- New borrowing freedoms
- Or large-scale institutional capital aligned with affordability outcomes
these commitments face the same structural limits as previous programmes.
The risk is not that targets are missed in a dramatic way, but that delivery underperforms quietly while expectations remain high.
Who in the Industry Should Pay Attention
This scrutiny session is particularly relevant for:
- Developers with exposure to GLA or Mayoral Development Corporation land
- Contractors forecasting housing-led workload into 2027–28
- Consultants advising on scheme viability, phasing, and funding risk
- Housing associations navigating grant certainty and build-out timing
Understanding where funding pressure sits helps explain why some schemes stall pre-start, why others reappear with revised tenures, and why timelines continue to stretch.
The Takeaway: London’s Constraint Is Financial, Not Aspirational
London does not lack housing ambition. It lacks a delivery model capable of financing that ambition at scale. Until funding mechanisms catch up with policy intent, the city’s housing targets will continue to outpace reality, not because the industry is unwilling to build, but because the economics do not yet support the volume being demanded.
The real significance of the 2026–27 budget scrutiny is not what is said in the Chamber, but what it reveals about how much housing London can actually afford to deliver. For the construction and development sector, that distinction matters far more than any headline target.
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Expert Verification & Authorship: Mihai Chelmus
Founder, London Construction Magazine | Construction Testing & Investigation Specialist |
