Response to the Homes for London Policy Note

In the Homes for London policy note, published on 23 October, the Government and the Mayor of London have announced a joint plan to boost new housing across the capital, where construction has slowed dramatically. The Homes for London package aims to make development more viable and increase the number of affordable homes.

Key measures include temporary discounts of up to 50% on local development levies (CIL) for projects providing at least 20% affordable housing, and a simpler planning route that removes the need for lengthy financial assessments. Design rules will be relaxed to allow greater flexibility on building layouts, dual-aspect requirements and cycle storage.

The Mayor will gain new powers to step in where councils reject housing schemes of 50 homes or more, and £322 million will be invested through a new City Hall fund to unlock stalled sites.

Together these changes are designed to get more homes built quickly, particularly affordable and rented homes, by cutting red tape and improving financial viability. The Government and the Mayor say they expect developers and councils to act swiftly to deliver the homes that Londoners urgently need.

Our response - overview

The fact that the Mayor and the Government are jointly proposing key changes to planning policy and how planning decisions are made in London, alongside ongoing reforms at the Building Safety Regulator, indicates the seriousness of the efforts to tackle those structural issues that have led to the slump in housing delivery across the capital this year. The breadth of the reforms reflects the scale of the housing crisis confronting London and its ripple effect across the country. Kick-starting housing delivery in London is fundamental to the Government’s aspirations of delivering 1.5m homes in this Parliament.

Significant policy changes
The Government and the Mayor appear to have grasped the nettle. The proposed temporary reduction in affordable housing to 20% and introduction of temporary CIL relief are, in my view, the most significant measures for developers. Both will make a real difference to the viability of schemes that might otherwise have been shelved.

Greater Mayoral intervention in planning applications is also notable, with the scope for intervention reduced from 150 to 50 home schemes. This could be positive provided the Mayor’s office has the capacity to manage the additional caseload and the Mayor is willing to overturn local decisions. While it doesn’t change the fundamentals of the planning process, it does signal a more active role for the Mayor in directly tackling the housing crisis by approving more applications.

Design relaxations, such as easing the dual-aspect and cycle storage requirements, are welcomed, though in practice the greatest benefit of this will be for those schemes still on the drawing board.

Timing matters
After years of under-delivery, timing is critical. The six-week consultation period starting in November means these measures are unlikely to take effect before the new year – and with the reduced 20% affordable housing rate applying only to permissions secured by 31^st March 2028, the window of opportunity is limited.

In reality, the changes will benefit those applications already in the pipeline or those that have been approved but have not commenced on-site due to viability issues. We can expect a rush to get permissions granted before the 31 March 2028 cut-off, but more immediately we will see a flurry of applications to amend existing permissions to enable them to benefit from the reduced affordable housing requirement and additional CIL relief. These will add to the workload for local planning authorities across London.

Whilst the reduction in the affordable housing requirements seems counter intuitive when London faces a housing crisis, the true mark of success will be a significant increase in housing starts, as others have said this week, 20% of something is better than 35% of nothing.