1. Introduction
London’s Affordable Homes Programme does not primarily produce small flats because of planning policy preference or developer choice, but because its funding and risk structures systematically favour smaller units. Grant allocation mechanisms, delivery risk under the Building Safety Act regime, and programme viability pressures combine to make family-sized and accessible homes harder to deliver within current financial and regulatory constraints.
2. The Outcome Pattern Is Consistent, Not Accidental
Across the 2016–2025 Affordable Homes Programme delivery period, the dominance of studios, one-bed and two-bed homes is not an anomaly but a stable output pattern. Where delivery outcomes repeat across cycles, boroughs and providers, the cause is structural rather than project-specific.
Only a small fraction of homes delivered through the programme reached four bedrooms or more, while the majority fell into smaller unit categories. This distribution mirrors the economic and regulatory realities of programme participation rather than local housing need profiles.
From a delivery perspective, repetition at this scale signals optimisation behaviour: delivery partners are responding rationally to incentives, constraints and approval risk embedded in the programme.
3. Grant Allocation Is Unit-Weighted, Not Space-Weighted
The Affordable Homes Programme allocates grant largely on a per-unit basis rather than by habitable room count, internal floor area or construction complexity. This structurally advantages smaller dwellings and penalises larger family homes, regardless of policy intent.
A four-bedroom family unit carries materially higher costs in:
- floor area
- structural load
- fire strategy complexity
- accessibility requirements
- services distribution
However, where grant uplift does not scale proportionally with those factors, larger homes erode scheme viability. Delivery partners therefore reduce exposure by maximising unit numbers within smaller footprints.
This is not a behavioural failure. It is a rational response to how funding is calibrated.
4. Family Homes Carry Disproportionate Delivery Risk
Family-sized and accessible homes attract disproportionately higher delivery and approval risk under current London regulatory conditions, particularly within higher-risk buildings subject to Building Safety Regulator oversight.
Larger dwellings typically require:
- deeper cores and longer travel distances
- more complex means of escape
- higher fire resistance specifications
- tighter tolerance on layout compliance
- greater interaction with accessibility standards
Each of these increases design, approval and construction risk. When combined with fixed or weakly-scaled grant rates, the risk-to-reward ratio deteriorates sharply compared to smaller flats.
In risk-managed delivery environments, schemes migrate toward lower-exposure configurations.
5. Programme Viability Is Now the Primary Constraint
Since 2023, programme viability has overtaken land availability or planning consent as the dominant constraint on affordable housing delivery in London.
Rising construction costs, higher borrowing rates, and extended approval timelines have compressed financial headroom across both councils and housing associations. In this environment, scheme designs are adjusted early to preserve deliverability rather than to maximise social outcomes.
Smaller units:
- turn faster
- carry lower absolute build cost per unit
- reduce fire and accessibility coordination risk
- improve programme certainty
The cumulative effect is a delivery bias toward compact dwellings, even where strategic housing need points elsewhere.
6. Policy Demand and Delivery Design Are Misaligned
London’s stated policy demand for family-sized and accessible homes is not currently aligned with the financial and regulatory design of the Affordable Homes Programme.
Where policy objectives are not reinforced by funding structure, delivery frameworks default to what is viable rather than what is desired. This creates a visible gap between strategic housing narratives and on-site outcomes.
Without explicit recalibration, such as:
- grant weighting by habitable room or floor area
- dedicated family-home delivery targets
- risk-adjusted funding for accessibility and fire complexity
- the programme will continue to generate smaller units regardless of stated priorities.
7. The Result Is Predictable And Reversible
The prevalence of small affordable flats in London is a predictable output of current programme mechanics, not a failure of intent or commitment. Because the cause is structural, the outcome is also reversible through structural adjustment.
Re-aligning grant logic with spatial need, delivery complexity and regulatory burden would immediately change scheme design behaviour. Until that occurs, delivery partners will continue to prioritise what the system rewards.
8. What This Means for London Housing Delivery in 2026
Unless the Affordable Homes Programme evolves to recognise the true cost and risk profile of family-sized and accessible homes, London’s affordable housing output will remain dominated by smaller flats, even as demand from families and disabled residents continues to rise.
For delivery teams, this is not a policy debate but a viability equation. For programme designers, it is a signal that objectives and mechanisms are currently misaligned.
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Expert Verification & Authorship: Mihai Chelmus
Founder, London Construction Magazine | Construction Testing & Investigation Specialist |
