The Greater London Authority's own analysis says London needs around 89,300 homes a year, slightly more than the Government's current standard-method assessment of 84,884. Yet City Hall has not turned that 89,300 figure into a London Plan construction target. The Draft London Plan instead sets a capacity-based target of 558,451 homes between 2027/28 and 2036/37, or about 55,845 a year. The distinction between housing need and deliverable planning capacity is central to understanding why both figures can exist at the same time.
Completed residential development at Upton Gardens in east London, illustrating the type of housing delivery required as the capital seeks to meet its long-term housing need. Original Photo: London Construction Magazine.
What Does the GLA's 89,300 Figure Actually Measure?
The figure was highlighted by the London Assembly Housing Committee as scrutiny of the Draft London Plan began in September. According to the Assembly, GLA analysis identifies annual need for around 31,300 social and low-cost rented homes, 14,200 intermediate-tenure homes and 43,800 homes for market sale and rent.
| Housing need | Homes per year |
|---|---|
| Social and low-cost rent | 31,300 |
| Intermediate tenure | 14,200 |
| Market sale and rent | 43,800 |
| Total | 89,300 |
That is a housing-need assessment, not a forecast of construction starts or a commitment to build 89,300 homes every year. LCM's earlier analysis examined the separate 558,451-home Draft Plan target against the Government's roughly 850,000-home assessment. The additional 89,300 figure provides another piece of the same evidence base rather than overturning that comparison.
Why City Hall Uses a Lower Capacity-Based Target
The Draft London Plan takes a different approach when deciding what boroughs should actually plan for. Its HN1 housing policy sets individual ten-year borough targets totalling 558,451 homes. Of that total, 502,351 homes are allocated through brownfield targets and 56,100 through greenfield targets. The figures are informed by the Strategic Housing Land Availability Assessment, the technical exercise used to assess land potentially available for housing and determine borough-level capacity.
City Hall's own evidence also makes clear that the London Plan cannot by itself make higher delivery happen. Construction costs, interest rates, labour availability, effective buyer demand, affordable-housing funding and supporting transport and utility infrastructure all affect how much consented capacity can become physical development. For higher-risk residential buildings, another stage sits between planning and construction. Gateway 2 approval is required before controlled building work can start, a distinction examined in LCM's earlier analysis of building safety regulation as a programme risk for London housing.
The Affordable Housing Numbers Explain the Difference
The Draft Plan itself demonstrates why housing need cannot simply be converted into one fixed construction target. City Hall states that its 2026 Strategic Housing Market Assessment produces different levels of affordable-housing need depending on the assumed overall rate of housing delivery.
On 1 September, City Hall corrected Policy HN3 to show a need for 238,430 low-cost rent homes and 129,020 intermediate homes by 2037, 367,450 affordable homes in total. It also corrected the affordable share associated with the Plan's overall supply level from 60% to 66%. Importantly, City Hall explicitly says those figures are statements of need rather than targets imposed on planning authorities. The correction did not change the substantive policy requirement.
LCM Analysis: Need Is Not an Order Book
For contractors, the useful distinction is between the scale of London's housing problem and the volume of construction that can realistically move through the development process. Housing need can exist without an identified site. A site can be allocated without planning permission. Planning permission can exist without finance, procurement or Gateway 2 approval. Even a funded scheme can still require enabling works and detailed design before main construction starts.
The private market provides a clear example. LCM previously reported 5,606 London new-build sales in the first half of 2026 alongside 4,629 completed unsold homes and 56 paused developments. Those figures describe market absorption and live development conditions, not London's underlying requirement for housing. City Hall is therefore not saying London only needs around 55,800 homes a year. Its own evidence points to substantially greater need. The Draft Plan is instead attempting to set a first-decade planning target around assessed capacity while requiring authorities to positively plan for additional longer-term capacity of at least 850,000 homes up to 2047.
What Happens Next?
The Draft London Plan remains under consultation until 5pm on 15 October 2026, followed by an Examination in Public during 2027 and planned adoption in early 2028. The next test is therefore not whether 89,300 or 55,845 is the 'correct' number. They measure different things. The construction question is how much additional land, funding, infrastructure and viable development can be brought forward so that London's planning capacity moves closer to the much larger housing need identified by the GLA itself.
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Expert Verification & Authorship: Mihai Chelmus
Founder, London Construction Magazine | Construction Testing & Investigation Specialist |
