London’s new affordable housing map is being presented as a more flexible response to the capital’s development crisis. From 2028, the draft London Plan proposes replacing a single London-wide Fast-Track threshold with three borough bands set at 20%, 25% or 35% affordable housing.
The policy recognises an obvious reality: a residential appraisal in Westminster does not operate in the same market as one in Havering, Croydon or Barking and Dagenham. Sales values, land costs, planning obligations, construction complexity and access to finance vary substantially across the capital.
However, the central construction question is not whether borough-specific thresholds are more sophisticated than one London-wide figure. It is whether the transition from the temporary 20% emergency route to higher thresholds in 2028 will unlock viable projects or encourage a rush of planning applications followed by another slowdown in actual construction starts.
London’s new borough bands may improve the relationship between planning policy and local development values, but they do not resolve the underlying delivery problem. The capital could experience a surge of applications before March 2028 without a corresponding increase in contracts, site mobilisation or completed homes.
Jump to: By the numbers | What the thresholds mean | The borough bands | Policy timeline | The 2028 cliff edge | Viability and land values | Construction consequences | Judicial review | The 558,000-home claim | How success should be measured | LCM analysis | FAQ
By the Numbers: London’s Affordable Housing Transition
| Indicator | Reported Position | Construction Reading |
|---|---|---|
| Temporary Fast-Track threshold on eligible private land | 20% affordable housing by habitable room | Designed to reduce viability disputes and unlock schemes before the new London Plan is adopted. |
| Emergency-route application deadline | 31 March 2028 | Creates a strong incentive to submit and validate applications before the policy window closes. |
| Reported CIL-relief commencement deadline | 31 March 2030 | The two-year gap means permissions secured before 2028 may not translate into immediate construction starts. |
| Authorities returning to a 35% threshold | 11 boroughs plus the City of London | Many of the affected areas contain high-value but technically complex development sites. |
| Authorities moving to a 25% threshold | Eight boroughs | Creates an intermediate band between the emergency position and the previous London-wide threshold. |
| Private-sector housing starts in London during 2025 | 5,547 homes | An approximately 84% reduction from the 33,782 private homes started in 2015. |
| London housing need under the national standard method | Approximately 88,000 homes annually | The scale of assessed need remains far above recent delivery and construction-start levels. |
| Potential capacity identified to 2037 | Up to 558,000 homes | This is capacity dependent on infrastructure, funding, land release and viable development—not a guaranteed construction programme. |
| Potential Greater London grey-belt land identified | 6,960 hectares | Theoretical classification does not mean the land is serviced, connected, available or immediately developable. |
Data warning: the figures above describe different measures. Private housing starts should not be confused with total housing completions, planning permissions, affordable housing starts or the theoretical capacity identified through planning studies. The 558,000-home figure represents potential capacity rather than a committed delivery target.
The Percentages Are Fast-Track Thresholds, Not Absolute Housing Quotas
The most important distinction in the new policy is also the one most likely to disappear from political headlines. The 20%, 25% and 35% figures are not automatic minimum quotas that every residential development must achieve. They are thresholds for accessing the Fast-Track Route. A qualifying scheme that meets the relevant percentage and tenure requirements can proceed without submitting a full financial viability assessment. This is intended to reduce lengthy negotiations over land value, developer profit, construction costs and the level of affordable housing a scheme can support.
A development offering less than the applicable threshold is not automatically prohibited. It can instead enter the Viability Tested Route, where the developer must demonstrate why the policy level cannot reasonably be delivered. That route may also expose the scheme to review mechanisms if values improve or construction is delayed. This distinction matters because the policy does not remove viability negotiations. It changes which projects can avoid them. In practice, schemes that cannot reach 25% or 35% may return to detailed appraisals, independent reviews, Section 106 negotiations and later-stage arguments over whether additional affordable housing can be captured.
A 35% borough threshold does not mean every scheme will deliver 35%. It means a scheme reaching 35% may avoid a full viability assessment. Projects below the threshold can still be approved, but the planning process becomes more complex, slower and less certain.
London’s Proposed 20%, 25% and 35% Affordable Housing Map
| Proposed Threshold | London Authorities | Policy Direction |
|---|---|---|
| 35% | Wandsworth, Lambeth, Southwark, Hammersmith and Fulham, Kensington and Chelsea, Westminster, Camden, Islington, Hackney, Tower Hamlets, Richmond upon Thames and the City of London | Return to the previous private-land Fast-Track threshold from 2028. |
| 25% | Merton, Lewisham, Greenwich, Newham, Waltham Forest, Haringey, Brent and Ealing | Intermediate position intended to reflect stronger viability than the lowest-value areas without immediately restoring 35%. |
| 20% | Barking and Dagenham, Barnet, Bexley, Bromley, Croydon, Enfield, Harrow, Havering, Hillingdon, Hounslow, Kingston upon Thames, Redbridge and Sutton | Retains the emergency private-land threshold where weaker development values are considered less able to absorb higher provision. |
The Mayor has described the structure as flexible. Boroughs could move into a higher band if market evidence shows that development values and viability have improved. The longer-term ambition remains a return to a 35% Fast-Track threshold across London. The proposed map therefore creates a starting framework rather than a permanently fixed settlement. However, flexibility also introduces uncertainty. Developers, landowners and lenders will need to consider not only the current borough threshold but the possibility that it could rise during the preparation, financing or redesign of a long-term scheme.
From the 2021 London Plan to the 2030 Construction Deadline
| Date | Policy Event | Delivery Significance |
|---|---|---|
| March 2021 | London Plan adopted with a 35% private-land Fast-Track threshold and higher expectations on certain public and industrial sites. | Affordable housing requirements were expected to become reflected in land values over time. |
| October 2025 | Government and City Hall announced emergency measures in response to the collapse in housing starts. | Policy shifted from maintaining a uniform threshold to actively attempting to revive stalled sites. |
| 25 March 2026 | The final Support for Housebuilding package confirmed the temporary route. | Eligible applications could access Fast-Track treatment at 20% affordable housing on private land. |
| 16 July 2026 | The draft new London Plan introduced proposed borough-specific thresholds. | The policy begins moving from a London-wide emergency response to a differentiated long-term system. |
| 15 October 2026 | Consultation on the draft London Plan is due to close. | Developers, councils and industry bodies can challenge the evidence behind the bands. |
| Early 2028 | The new London Plan is expected to be adopted following examination. | New applications would begin operating under the borough-based thresholds. |
| 31 March 2028 | Applications must be submitted and validated to use the temporary 20% route. | Likely to become a major planning and land-value deadline. |
| 31 March 2030 | Reported deadline for eligible schemes to commence and benefit from temporary borough CIL relief. | Shows that a scheme may preserve policy benefits without moving immediately into full construction. |
Why March 2028 Could Become a Planning Cliff Edge
The strongest immediate effect of the policy may be behavioural. A developer preparing a scheme in Southwark, Camden, Tower Hamlets or Westminster could face a 20% Fast-Track threshold if the application is validated before 31 March 2028 and a 35% threshold after the new system takes effect. That difference is large enough to influence site acquisition, design, tenure negotiations, funding structures and the timing of planning submissions. It may also encourage developers with existing consents to explore Section 73 applications or deeds of variation while the emergency route remains available.
The result could be a visible increase in planning applications during 2027 and early 2028. That would not necessarily mean London’s housing construction market had recovered.
An application can be validated without a main contractor being appointed. A permission can be issued without development finance being secured. A site can technically commence through limited enabling activity without progressing immediately into piling, structure, façade or fit-out. This distinction between planning activity and physical delivery is consistent with the wider two-speed market identified in LCM’s analysis of London construction during the first half of 2026. The capital retains a substantial theoretical pipeline, but projects are being filtered according to funding strength, risk exposure and the ability to reach construction certainty.
The March 2028 deadline may increase the number of applications entering the system. The real test will be how many of those applications secure finance, appoint contractors, discharge pre-commencement conditions and progress beyond enabling works.
Higher Sales Values Do Not Automatically Mean Stronger Viability
The broad logic behind the borough bands is understandable. Central and inner-London boroughs generally achieve higher residential sales values, while many outer-London locations have lower values and thinner development margins. However, sales value is only one side of a development appraisal. Central London also carries some of the capital’s highest land prices and most demanding construction conditions.
A constrained inner-London project may require complex demolition, party-wall arrangements, basement construction, temporary works, restricted logistics, heritage retention, utility diversions and extended professional input before the primary structure begins. Higher-rise residential schemes also face Building Safety Regulator approvals, second-staircase requirements, fire-engineering coordination and more demanding evidence management. These costs can absorb a significant part of the additional gross development value associated with a central location. A high-value borough is therefore not automatically a high-viability borough.
The weakness of a borough-wide system is that it treats a large and internally varied planning authority as one market. A prime central site and a difficult estate-edge or infrastructure-constrained site can face the same Fast-Track percentage despite having materially different costs and sales assumptions. Boundary effects may also become visible. Two sites separated by a road, railway or borough boundary could face different Fast-Track requirements even where their construction costs, market values and access to infrastructure are broadly similar.
The Missing Evidence Is the Detail Behind the Viability Bands
The Greater London Authority has said the three bands are based on updated viability evidence, differing development values, land costs and the potential for growth during the plan period. For the construction market, the headline percentages are less important than the assumptions beneath them. The evidence base needs to show what has been allowed for in relation to:
• residential sales values and sales rates;
• affordable housing transfer values;
• benchmark and residual land values;
• current labour and material costs;
• finance rates and developer returns;
• Section 106, CIL and Building Safety Levy liabilities;
• demolition, remediation, basements and abnormal works;
• Building Safety Regulator and second-staircase costs;
• professional fees, contingency and programme duration;
• grant funding and the long-term purchasing capacity of registered providers.
A viability model based on a strong market recovery by 2028 could produce thresholds that appear sustainable on paper but prove difficult under real tender prices and finance conditions. This risk is reinforced by the cost pressures explored in the June 2026 UK construction market trend, where workload, finance and input costs continued to move differently across sectors.
Land Values Will Not Reprice Overnight
The threshold approach is partly intended to make affordable housing a predictable policy cost that becomes reflected in the amount developers pay for land. In theory, a site subject to a clear 35% requirement should be purchased at a lower residual land value than the same site without that obligation. In practice, adjustment is slow. Many sites are controlled through historic purchases, option agreements, conditional contracts, joint ventures or lender valuations based on earlier assumptions. Landowners may resist lower offers, while lenders may be reluctant to recognise an immediate reduction in the value of their security.
The new bands may therefore work more effectively for future land transactions than for sites already held within existing development pipelines. A site bought at an aggressive value can remain unviable even after planning policy becomes more flexible. This is one reason the emergency 20% route cannot by itself guarantee starts. Reducing affordable housing may improve an appraisal without correcting an inflated land value, weak sales market, expensive finance package or unresolved infrastructure constraint.
What the Policy Could Mean for London’s Construction Pipeline
For contractors and suppliers, the question is whether the borough bands change the number of schemes physically reaching site or merely alter the planning negotiations that take place before a project is paused.
| Construction Area | Potential Effect | Principal Risk |
|---|---|---|
| Main contracting | A larger pipeline of consented residential projects could emerge before 2028. | Permissions may remain unfunded or fail to reach contract award. |
| Demolition and enabling | Developers may bring forward early works to preserve permissions or demonstrate commencement. | Limited starts may not progress into the main structural programme. |
| Groundworks and frames | Meaningful workload would follow where schemes secure full finance and proceed beyond enabling activity. | High-rise and complex schemes remain exposed to regulatory delay and cost escalation. |
| Façade and M&E | A genuine housing recovery would create substantial later-stage package demand. | These packages are not released until developers have confidence in full-project funding and programme certainty. |
| Housing associations | The 60% Social Rent share of the affordable element could support stronger affordable delivery. | Registered providers must have the borrowing capacity and grant support to acquire the homes. |
| SME developers | Lower Fast-Track thresholds could reduce the cost and delay of detailed viability reviews. | Smaller balance sheets remain highly exposed to finance costs and planning uncertainty. |
| Planning and viability consultants | Fast-Track schemes may need fewer viability negotiations during the emergency window. | Demand may rise again after 2028 as more projects fall below their borough threshold. |
Even where policy successfully increases development activity, London will still need the trade capacity to deliver it. LCM’s assessment of the UK construction trades skills shortage found persistent pressure across occupations that are fundamental to housing, infrastructure, retrofit and building-safety work. A sudden concentration of residential starts could increase labour competition and tender inflation rather than simply expanding output.
The Tenure Split Could Be as Important as the Headline Percentage
Under the emergency route, at least 60% of the affordable housing element is expected to be Social Rent, with the balance provided through intermediate tenures. The thresholds are measured by habitable room rather than simply by the number of units. That distinction affects the commercial value of the affordable housing package and the type of registered provider required. A nominal affordable housing percentage can conceal substantial differences in tenure, unit size, rental level and transfer value.
A scheme delivering 20% affordable housing with a strong Social Rent component may produce a deeper form of affordability than a higher percentage dominated by less affordable intermediate products. Equally, a deeper tenure mix may require more grant or place greater pressure on viability. The policy should therefore be judged not only by the percentage of affordable habitable rooms but by who can afford the completed homes and whether registered providers are financially able to acquire them.
The Judicial Review Adds Another Layer of Uncertainty
Tower Hamlets, Hackney and Lewisham launched a judicial review challenge against the Mayor’s decision to introduce the temporary 20% route through London Plan Guidance. Lambeth, Southwark, Waltham Forest and Haringey have been reported as supporting the action. The challenge centres on whether the reduction was introduced using the correct statutory process, whether the evidence justified a London-wide change and whether councils were adequately consulted.
The legal challenge is politically significant because two of the formal claimant boroughs (Hackney and Tower Hamlets) would return to 35% from 2028, while Lewisham would rise to 25%. The draft plan may address some of the argument over a uniform London-wide reduction by introducing differentiated bands through the formal plan-making process. It does not automatically resolve the legality of the temporary route or the position of applications already seeking to rely on it.
The 558,000-Home Figure Is Capacity, Not a Construction Commitment
The new housing framework identifies potential capacity for as many as 558,000 homes by 2037. This figure should not be interpreted as a funded construction programme or a guarantee that those homes will be delivered. Capacity depends on land being allocated, planning applications being approved, finance being available, infrastructure being delivered and schemes remaining commercially viable. Major transport investments may be required to unlock some of the largest growth areas.
The plan also permits limited and selective consideration of Green Belt land, subject to requirements relating to affordable housing, design, transport connectivity, biodiversity and public access to green space.
A study published alongside the draft identified approximately 6,960 hectares that could potentially meet the definition of grey belt. That represents around 20% of Greater London’s reported 34,798 hectares of Green Belt. However, classification is not the same as deliverability. Land may be fragmented, ecologically constrained, poorly connected, occupied by operational uses or dependent on costly utility and transport upgrades. Boroughs ultimately determine grey-belt designations through their own evidence and plan-making processes.
The draft plan can identify where homes might be accommodated. It cannot by itself provide the transport, utilities, grant, registered-provider capacity, development finance, skilled labour or contractor balance sheets required to build them.
How London Should Measure Whether the Policy Is Working
The effectiveness of the new thresholds cannot be measured by the number of planning applications alone. A meaningful monitoring framework should distinguish each stage of development.
| Measure | Why It Matters |
|---|---|
| Applications using the temporary route | Shows whether developers consider the 20% threshold commercially useful. |
| Permissions granted | Shows whether the route is shortening negotiations and converting applications into consents. |
| Full construction starts | Separates substantive delivery from paper permissions or limited commencement activity. |
| Affordable homes started by tenure | Reveals whether lower thresholds produce more Social Rent and intermediate homes in absolute terms. |
| Grant awarded and drawn | Shows how dependent delivery is on public subsidy rather than developer-funded provision. |
| CIL relief claimed | Allows the public cost of the intervention to be compared with the number of homes unlocked. |
| Time from permission to main contract | Provides a practical measure of whether planning reform is reaching the construction market. |
| Completions and occupations | Ultimately determines whether policy intervention has produced usable homes. |
LCM Analysis: A More Intelligent Map, but Not Yet a Delivery Solution
Moving away from a uniform London-wide Fast-Track threshold is a rational policy development. Boroughs have different markets, and insisting that every part of London supports the same affordable housing percentage can produce either unrealistic expectations or unnecessarily weak requirements. The three-band system is therefore more responsive than a single headline number. It may provide greater certainty for land transactions and reduce prolonged viability discussions where the relevant threshold can genuinely be achieved.
However, the system remains geographically broad. Borough boundaries do not perfectly map development values, construction costs or site constraints. A 35% threshold may be achievable on a straightforward high-value site but extremely difficult on another project in the same borough involving heritage retention, deep basements, complicated logistics or higher-risk-building regulation. The greatest short-term risk is the transition itself. Developers in boroughs moving from 20% to 25% or 35% have a clear incentive to validate applications before 31 March 2028. That may create a statistical improvement in planning activity while leaving the construction pipeline dependent on finance, sales, grant and land-value renegotiation.
The two-year separation between the emergency application deadline and the reported CIL commencement deadline strengthens that concern. It allows schemes to secure a favourable planning position before 2028 while retaining additional time to decide whether full construction is commercially possible. The new London Plan should therefore be judged by physical delivery rather than policy sophistication. The decisive indicators will be main contracts awarded, sites progressing beyond enabling works, affordable homes started by tenure and completed homes occupied. London does not lack planning ambition or theoretical development capacity. It lacks a reliable mechanism for converting consented land into funded, regulated and buildable construction programmes.
The borough bands could become a more credible long-term framework. But unless the underlying viability evidence reflects real tender prices, finance costs, regulatory programmes and registered-provider capacity, London risks moving from a temporary 20% lifeline directly back into the conditions that stalled development in the first place.
What the Headline Does Not Tell Us
• The percentages determine access to Fast-Track planning; they are not compulsory quotas for every development.
• A planning application submitted before March 2028 may not become a full construction start for months or years.
• CIL relief reportedly runs to commencements before March 2030, creating a different deadline from the planning route.
• Higher sales values in central London are offset by higher land values, construction complexity and regulatory costs.
• A borough-wide threshold cannot reflect every neighbourhood or site condition.
• The 558,000-home figure represents potential capacity, not funded or contracted delivery.
• Grey-belt classification does not mean land is immediately available or capable of supporting construction.
• The depth and tenure of affordable housing may matter as much as the headline percentage.
Frequently Asked Questions
Is London making 35% affordable housing compulsory in 12 authorities?
No. The proposed 35% figure is a Fast-Track threshold. Schemes meeting it may avoid a detailed viability assessment. Schemes proposing less can still use the Viability Tested Route.
No. The proposed 35% figure is a Fast-Track threshold. Schemes meeting it may avoid a detailed viability assessment. Schemes proposing less can still use the Viability Tested Route.
Which London authorities are expected to return to 35%?
Wandsworth, Lambeth, Southwark, Hammersmith and Fulham, Kensington and Chelsea, Westminster, Camden, Islington, Hackney, Tower Hamlets, Richmond upon Thames and the City of London.
Wandsworth, Lambeth, Southwark, Hammersmith and Fulham, Kensington and Chelsea, Westminster, Camden, Islington, Hackney, Tower Hamlets, Richmond upon Thames and the City of London.
When does the temporary 20% route end?
Applications must be submitted and validated by 31 March 2028 to qualify under the temporary planning route.
Applications must be submitted and validated by 31 March 2028 to qualify under the temporary planning route.
Why is 31 March 2030 also important?
Eligible schemes may reportedly need to commence by 31 March 2030 to benefit from temporary borough CIL relief. This is separate from the March 2028 application deadline.
Eligible schemes may reportedly need to commence by 31 March 2030 to benefit from temporary borough CIL relief. This is separate from the March 2028 application deadline.
Will the policy immediately increase construction starts?
Not necessarily. It may increase applications and permissions, but physical starts still depend on development finance, land values, grant, sales demand, regulatory approval and contractor procurement.
Not necessarily. It may increase applications and permissions, but physical starts still depend on development finance, land values, grant, sales demand, regulatory approval and contractor procurement.
Why are different boroughs receiving different thresholds?
The GLA says the bands reflect differences in development values, land costs and viability across London. The detailed assumptions behind that assessment will be central to the consultation and examination process.
The GLA says the bands reflect differences in development values, land costs and viability across London. The detailed assumptions behind that assessment will be central to the consultation and examination process.
Does the 558,000-home figure mean those homes will be built?
No. It represents identified potential capacity and remains dependent on planning, infrastructure, funding, land availability and commercial viability.
No. It represents identified potential capacity and remains dependent on planning, infrastructure, funding, land availability and commercial viability.
Could borough thresholds change after 2028?
Yes. The proposed framework allows boroughs to move into higher bands where evidence shows that market conditions and development viability have improved.
Yes. The proposed framework allows boroughs to move into higher bands where evidence shows that market conditions and development viability have improved.
Sources and methodology: This London Construction Magazine analysis draws on the draft London Plan announcement published on 16 July 2026, the March 2026 Support for Housebuilding package and London Plan Guidance, reported Molior housing-start data, published statements concerning the borough judicial review and supporting development-market research. Policy proposals have been distinguished from adopted requirements, while housing starts, permissions, completions and identified capacity are treated as separate measures.
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Expert Verification & Authorship: Mihai Chelmus
Founder, London Construction Magazine | Construction Testing & Investigation Specialist |
