Starmer readies new policies with projected construction in the city plunging
Prime minister Keir Starmer is preparing emergency measures to spur homebuilding in London and tackle a crisis that’s seen projected housing construction in the city plummet.
The changes will reportedly include a reduction in the percentage of affordable homes developers must provide for speedier planning approval to around 20% for private land, Bloomberg reported on Wednesday.
Home design rules are also set to be relaxed, with further changes to the appraisal process being mooted in a slate of measures that could be unveiled this week.
A spokesperson for the housing, communities and local government ministry said a final decision still hadn’t been made on the changes, Bloomberg said, although London mayor Sadiq Khan’s office confirmed he was working with the housing secretary on reforms.
Recent weeks have seen grim news for London’s homebuilding outlook, with research company Molior London forecasting last week that there will be just 15,000 to 20,000 homes under construction in the city by the beginning of 2027.
That’s a huge dive from the years leading up to the COVID-19 pandemic, and suggests that the affordability outlook could be set to worsen for buyers in the capital as supply dwindles.
It reflects a wider problem across the UK, with the number of homebuilders falling for the first time in a decade in the year to September amid spiking construction costs and high mortgage rates.
A Hamptons report last week showed over 1,500 builders stopped trading over the previous 12 months, calling into question whether the government can meet its ambitious target of building 1.5 million new homes across the country.
A stagnant housing market hasn’t helped, either. The Office for National Statistics said on Wednesday that prices had fallen for the first time in the city for over a year, driven by a 2.6% annual slide in flat values. Semi-detached and terraced home prices were up.
Last week, housing minister Steve Reed and chancellor Rachel Reeves – whose autumn budget is fast approaching – announced a new planning bill to boost housing and infrastructure construction.
That move bids to cut red tape and make it more difficult for councils to reject planning permission, tackling the lengthy court appeals process.
But economic uncertainty has also weighed on construction firms’ optimism, with S&P Global suggesting last month that construction across London has been on the wane for eight months in a row.
