Sadiq Khan to blame for slump in London housing starts, think tank says
Sadiq Khan is to blame for a dearth in housebuilding in London, a leading think tank has warned, as new construction projects slumped to their lowest level seen in years.
A perfect storm of challenging macroeconomic conditions, needlessly stringent regulation and a sluggish planning process has helped push construction rates down to just 4,170 housing starts in the 2024/25 financial year, the lowest rate of any region in the UK.
“Like straws on a camel’s back, [these factors] have combined to break building in London,” a report by the Centre for Policy Studies (CPS) said.
“The government and the mayor need to urgently remove the obstacles to building homes in London – before an already bleak situation gets even worse.”
‘More and more restrictive’
The CPS found that despite being nine years into Sadiq Khan’s tenure as mayor, it remains the case that four-fifths of London home completions last year received planning permission under his predecessor Boris Johnson.
Worse still, even a majority (53 per cent) of housing starts in the past year also received planning permission under Johnson, highlighting the scale of the collapse in construction rates since the beginning of the 2020s.
The CPS report found that higher rates of affordable housing requirements set under Khan made a number of projects unviable, as well as huge increases to construction costs imposed by tougher fire safety regulations, which has required buildings of more than 18 metres in height to have at least two staircases.
Proposals for new buildings also have to be submitted to a new building safety regulator – which has rejected as much as 92 per cent of applications while taking an average of 36 weeks to consider each one.
“High affordability requirements that were imposed on the London housing market pre-pandemic, when they were deemed ambitious but meetable, have proved impossible to comply with once the economic weather changed,” said Ben Hopkinson, head of housing and infrastructure at the CPS.
“New regulators and regulations have been imposed without considering their economic costs. The London Plan has got more and more restrictive. Land that could be built on, like industrial and opportunity areas, has not been used well.
“These are all policy choices that the mayor of London, local authorities and central government have made. And combined with the worsening macroeconomic conditions, they have collectively killed viability across the capital.”
Mayor looks to green belt for fresh start
Housing secretary Steve Reed is reportedly in talks with mayor Sadiq Khan over using “emergency” provisions to soften the design standards for new apartment blocks in a bid to revive housebuilding in the capital.
Khan earlier this year vowed to turn around London’s lacklustre construction rates by relaxing rules on building on the green belt, a ring of protected land around the outskirts of the capital.
“We simply aren’t going to have – even if we build on every single piece of brownfield site – a supply of homes to meet the demand. That is the reality,” Khan told City PM.
“When I was growing up I assumed the green belt was green and pleasant land, rich in wildlife [but much of it is] poor quality, badly maintained, inaccessible to Londoners,” he said.
“I’m not suggesting that we build on our gorgeous parks, I’m not suggesting that we’re building on our lush green spaces in London. What I am saying is we should now be actively exploring homes we can build there – with conditions.”