UK Government Unveils Plan to Fuel London Housing Delivery

London’s housing nadir is getting an emergency jolt.

The government of the United Kingdom and City Hall announced a sweeping package of short-term measures to accelerate homebuilding across the capital, targeting stalled developments and rising affordability pressures.

The goal is to make projects viable again in a city where high interest rates, construction costs and planning friction have pushed more than one-third of boroughs to record zero housing starts in the first quarter this year.

Under the plan, sites that include at least 20 percent affordable housing will be eligible for a fast-tracked planning process and temporary relief from development taxes, provided they can break ground quickly.

The plan includes £322 million ($430 million USD) in seed funding for a City Hall Developer Investment Fund, according to the Ministry of Housing, Communities and Local Government. The Mayor of London will gain expanded call-in powers over housing developments of 50 units or more, with the authority to bypass borough delays and even greenlight projects on certain protected parcels.

The measures, subject to consultation, run through March 2028 or until the next London Plan is published.

Housing Secretary Steve Reed said the reforms are crucial to delivering the government’s pledge of 1.5 million new homes nationwide under its “Plan for Change.” Mayor Sadiq Khan said the move was critical for affordable housing, noting London’s toughest building climate since the 2008 crash.

Developers stand to benefit from loosened density and design constraints — so long as projects meet ventilation, daylight and privacy standards — and from flexibility on requirements like cycle storage.

But the package comes with teeth; any developer failing to build on time faces a “gain-share” clause, forcing profit-sharing with boroughs to fund additional affordable units.

The government also plans on clarifying a planning law to prevent developers from using it to renegotiate obligations on viability or affordable housing. Officials say these changes, paired with the Building Safety Regulator’s streamlined approvals for high-rises, will shave months off the development cycle.