By Alastair Butcher, regional development director of Barratt London
The government’s latest intervention in London housing is welcome – but it won’t fix delivery on its own. A new planning route for schemes delivering at least 20% affordable housing, targeted relief from the Community Infrastructure Levy, and expanded Mayoral call-in powers all point in the right direction. It is particularly encouraging to see MHCLG and the Greater London Authority working together to pull the levers needed to unlock housebuilding in the capital. But we should be clear: this alone won’t fix London’s housing challenge.
The scale of the problem remains stark, and data from the Ministry of Housing, Communities and
Local Government (MHCLG) underlines just how significant the challenge is. Only 4,522 social and affordable housing starts were made in the capital in 2024/25 – down from 26,386 two years earlier.
Inflationary pressures alongside existing viability challenges have pushed up construction costs and discouraged builders of all sizes from committing to London.
Against that backdrop, any policy that helps unlock stalled schemes is to be welcomed, and there’s potential here. The simplification of the fast-track approach from the original consultation is pragmatic and welcome, giving developers far greater scope to bring schemes forward. A clearer, time-limited planning route for policy-compliant schemes could help bring forward sites that have been stuck in the system for too long. The approach to CIL relief will be critical. It has the potential to make a meaningful difference to viability – but only if the mechanism that emerges from consultation is simple, consistent and easy to apply in practice.
At Barratt London, we can already see how measures like these could make a difference – we now expect these measures to help accelerate the delivery of at least 4,500 homes across four sites – and in reality, the potential could be significantly greater.
But policy reform only addresses part of the problem. The reality is that developers are still operating in a very challenging environment. Build costs remain elevated, viability is under sustained pressure, and financing conditions – while improving – are still tight by recent standards. There are also real concerns about the short- to medium-term outlook. Ongoing instability in the Middle East is highly likely to feed into build cost inflation, and there remains uncertainty around the trajectory of interest rates. All of this makes it harder to get schemes moving, and harder still to maintain momentum once they are underway.
There are also more immediate pressures on the horizon. Changes to Landfill Tax from April and the introduction of the Building Safety Levy later this year will add further cost into the system. These are important policy interventions in their own right, but they inevitably impact scheme viability.
And then there is the political context. With London borough elections taking place this May, there is a real possibility of a shift in local political priorities. Planning committees are already operating in a cautious environment. There is a real risk that the post-election landscape becomes more uncertain than at any point in the past decade or more. In that context, developers are likely to become increasingly reliant on the Mayor’s call-in powers. Ensuring the GLA is properly resourced to exercise these powers effectively – from early engagement through to determination – will be critical.
So while the direction of travel is positive, the industry should be under no illusion about the scale of what still needs to be done. If we are serious about increasing housing delivery in London, we need a system that works consistently from end to end, from planning through to delivery and sales. That means not only reforming process, but supporting viability, maintaining political alignment, and ensuring there is sufficient demand in the market.
To truly get London building again, demand-side measures are needed in tandem to boost buyer activity. The cost of renting and lack of financial support for young adults have diminished the first-time buyer market in London. A successor to Help to Buy, for instance, would support buyers onto the ladder and stimulate the type of demand that will give developers the confidence to build at pace.
Ultimately, this is about certainty. Developers need confidence that if they bring forward policy-compliant schemes, they will be supported through the system and delivered viably. Without that, even well-intentioned reforms will only go so far.
The government and the Mayor have taken an important step. Now the focus must shift to making these changes work in practice – and to ensuring they are part of a wider, sustained effort to get
London building again. Because the need is not going away and neither is the urgency.
