Recent plans to reduce affordable housing targets in London have ignited stormy debates. Developers, housing advocates and government officials have contributed during the process. The proposed changes, which aim to alleviate the declining rates of new home construction, have raised concerns about the impact on vulnerable populations, particularly children experiencing homelessness.
Mairi MacRae, director of campaigns and policy at Shelter, has already condemned these proposals. She argues that decreasing the affordable housing target from 35% to 20% will prioritize profit-driven motives over the urgent needs of the community. MacRae stressed that these plans would put at risk thousands of children in London who are already being made homeless today.
“Plans to slash targets on affordable housing in London will allow profit-driven developers to continue looking after their bottom line at the expense of 97,000 children who are growing up homeless in the capital.” – Mairi MacRae
London’s rapidly changing housing landscape has suddenly tipped over into a crisis. Escalating costs and stricter regulations that followed the Grenfell Tower tragedy have compounded an already harsh reality. The tragedy has spurred increased criticism of construction practices, affecting the ability to build new homes in the process.
In Q1 2025, builders only launched projects for 3,248 new private-sector homes in London. This map depicts that time period’s dramatic slowdown in housing construction. This figure vividly depicts what’s become a national emergency of housing supply. Yet, with virtually zero social housing being built, the alarm sounded by experts is critical.
Robert Colvile, director of the Centre for Policy Studies, highlighted the severity of the issue by stating, “We’re now in a situation where we’re building one 20th of the houses we need in London. That’s going to torpedo the government’s target of 1.5m homes.”
In order to address these urgent crises, Sadiq Khan, Mayor of London, is taking action together with Housing Secretary Steve Reed. Collectively, they’re drawing up a reform package that would increase the pace and scale of new housing in the capital. Their announcement is expected in the coming weeks and could include actions like raising government incentives for affordable units. That would create a massive new incentive for developers to seek this funding, covering the cost of public investment up to half of their homes being affordable.
Though developers have largely embraced the proposed reforms, they’ve faced stinging rebuke from homelessness charities. Kate Henderson, the chief executive of the National Housing Federation, expressed her concerns. Like Whitaker, she worries about the administration’s hints at undermining guaranteed affordable housing goals.
“Whilst we recognise the unique challenges to development faced in London, it is essential that we do not water down our affordable housing ambitions.” – Kate Henderson
The introduction of the community infrastructure levy does not help either. It places additional fiscal burdens on constructors for community needs such as major thoroughfares and hospital infrastructures. This state law is one of many reasons it’s more expensive to build homes in London than anywhere else in the state.
Industry stakeholders are still at odds over the best way to tackle the housing crisis as discussions continue. Advocates for affordable housing maintain that lowering these targets will have more severe long-term impacts, especially for low-income families. Critics argue that any truly implementable plan should reconcile development imperatives with social equity.
One advocate remarked on the urgency of addressing the crisis: “This is an emergency and we need to act. There is next to no social housing currently being built in London, and 20% of something is better than 35% of nothing.”
We’ll be watching with deep interest the next package that comes from Mayor Khan and Housing Secretary Reed. This effort can create an important precedent for better future housing policy. Stakeholders are looking for the administration to take a balanced approach, one that prioritizes smart development while ensuring that any disruptions don’t impact vulnerable populations.