Introduction
London’s housing delivery system is facing mounting pressure as high construction costs, planning delays and viability constraints continue to stall major development sites across the capital. On 25 March 2026, the Ministry of Housing, Communities and Local Government (MHCLG) and the Greater London Authority (GLA) confirmed an emergency package designed to accelerate housebuilding and unlock dozens of stalled schemes.
The measures, announced by Housing Secretary Steve Reed and Mayor of London Sadiq Khan, introduce temporary planning changes, expanded mayoral call-in powers and financial interventions aimed at restarting projects that have been delayed by rising construction costs, financing pressures and regulatory complexity. The policy is part of the government’s wider commitment to deliver 1.5 million homes during the current Parliament while helping London move back toward its target of 88,000 homes per year.
Sadiq Khan message on X: ''Building the social and affordable homes Londoners need is a top priority. I'm taking tough decisions to get them built, including working closely with the Government to finalise a temporary emergency package which will unlock stalled sites across London.''
What This Means for the Construction Sector
The emergency package effectively creates a temporary regulatory framework intended to unblock stalled housing schemes by combining faster planning approvals, targeted financial relief and expanded decision-making powers for the Mayor of London. By accelerating planning routes for schemes delivering affordable housing and allowing greater intervention in borough planning decisions, the government is attempting to overcome viability barriers that have slowed housing delivery across London’s construction market.
Regulatory Framework
The emergency measures sit within a wider framework of national housing and planning reform, including powers being introduced through the English Devolution Bill, which expands mayoral authority over planning decisions. Secondary legislation will also allow the Mayor of London to call in planning applications of 50 homes or more where boroughs intend to refuse them, with the new powers expected to come into force in May 2026.
The measures also interact with the broader regulatory environment affecting housing delivery, including the Building Safety Act 2022, which has introduced additional safety requirements for higher-risk residential buildings and has contributed to delays in some schemes while new approval processes have been implemented by the Building Safety Regulator (BSR).
The emergency measures sit within a wider framework of national housing and planning reform, including powers being introduced through the English Devolution Bill, which expands mayoral authority over planning decisions. Secondary legislation will also allow the Mayor of London to call in planning applications of 50 homes or more where boroughs intend to refuse them, with the new powers expected to come into force in May 2026.
The measures also interact with the broader regulatory environment affecting housing delivery, including the Building Safety Act 2022, which has introduced additional safety requirements for higher-risk residential buildings and has contributed to delays in some schemes while new approval processes have been implemented by the Building Safety Regulator (BSR).
By the Numbers
Key indicators illustrate the scale of London’s housing delivery challenge:
Key indicators illustrate the scale of London’s housing delivery challenge:
| Indicator | Value |
|---|---|
| Social and affordable housing starts in London (2024/25) | 4,522 |
| Social and affordable housing starts (2022/23) | 26,386 |
| Government national housing target | 1.5 million homes |
| London annual housing need target | 88,000 homes per year |
| Social & Affordable Homes Programme | £39 billion |
| Allocation to London | £11.7 billion |
| City Hall Developer Investment Fund | £324 million |
| Homes approved by BSR in last 12 weeks | 10,500+ |
| Homes approved across London in that period | 3,800 |
These figures highlight the gap between London’s housing needs and current delivery levels.
Policy Comparison — Key Emergency Measures
| Measure | Purpose | Impact on Development |
|---|---|---|
| Fast-Track Planning Route | Accelerate approvals for schemes with ≥20% affordable housing | Reduces planning timelines |
| Community Infrastructure Levy Relief | Temporary reduction or removal of CIL charges | Improves scheme viability |
| Removal of GLA Density Constraints | Allows more homes on allocated sites | Increases development capacity |
| Expanded Mayoral Call-In Powers | Mayor can review borough refusals for schemes 50+ homes | Prevents stalled planning decisions |
| Early Stage Review Mechanism | Developers must demonstrate delivery progress | Maintains accountability |
Industry Impact
| Actor | Consequence |
|---|---|
| Developers | Faster planning routes may improve scheme viability and financing certainty |
| Contractors | Potential increase in project pipeline as stalled sites restart |
| Housing Associations | Greater opportunities to deliver affordable housing through accelerated approvals |
| Local Authorities | Reduced control over certain planning decisions due to expanded mayoral intervention |
| Supply Chains | Increased demand for construction labour and materials if sites restart simultaneously |
For contractors and consultants operating in London, the emergency measures signal a potential short-term increase in development activity, particularly on sites that have already received outline planning consent but stalled at later stages.
Related Construction Intelligence
This policy sits alongside several wider structural pressures affecting London construction, including:
Together these factors have slowed housing delivery despite strong demand.
This policy sits alongside several wider structural pressures affecting London construction, including:
- Building Safety Regulator approval backlogs
- Rising construction costs and financing pressures
- Affordable housing viability constraints
- Planning system complexity across borough authorities
Together these factors have slowed housing delivery despite strong demand.
Evidence-Based Summary
London’s housing slowdown is not driven by a single issue but by a combination of financing pressures, planning delays and regulatory complexity affecting development viability. While the emergency package introduces faster planning routes and financial relief mechanisms, the effectiveness of the policy will depend on whether stalled schemes can secure funding and move rapidly through the construction pipeline. If viability conditions remain challenging, the measures may unlock some sites but are unlikely to close the capital’s housing delivery gap on their own.
London’s housing slowdown is not driven by a single issue but by a combination of financing pressures, planning delays and regulatory complexity affecting development viability. While the emergency package introduces faster planning routes and financial relief mechanisms, the effectiveness of the policy will depend on whether stalled schemes can secure funding and move rapidly through the construction pipeline. If viability conditions remain challenging, the measures may unlock some sites but are unlikely to close the capital’s housing delivery gap on their own.
Key Institutional Relationships
The Ministry of Housing, Communities and Local Government oversees national housing policy and is responsible for delivering the government’s target of 1.5 million homes during the current Parliament. The Greater London Authority coordinates strategic housing policy across the capital and works with borough councils to deliver development sites.
The Building Safety Regulator regulates the safety approval process for higher-risk residential buildings, influencing the pace at which large housing developments can progress. The Department for Transport, Transport for London and Network Rail collaborate on infrastructure projects such as Beam Park station, which are essential to unlocking large regeneration schemes.
The Ministry of Housing, Communities and Local Government oversees national housing policy and is responsible for delivering the government’s target of 1.5 million homes during the current Parliament. The Greater London Authority coordinates strategic housing policy across the capital and works with borough councils to deliver development sites.
The Building Safety Regulator regulates the safety approval process for higher-risk residential buildings, influencing the pace at which large housing developments can progress. The Department for Transport, Transport for London and Network Rail collaborate on infrastructure projects such as Beam Park station, which are essential to unlocking large regeneration schemes.
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Expert Verification & Authorship: Mihai Chelmus
Founder, London Construction Magazine | Construction Testing & Investigation Specialist |
