Sir Sadiq Khan says “nothing is off the table” as he considers whether to reduce the amount of affordable housing that developers have to build in London.
The Labour mayor is reportedly seeking to water down the requirement that 35 per cent of new developments have to be “affordable” and available to Londoners on housing waiting lists.
💬 Comment: Sadiq Khan's 35% affordable housing target is helping no-one: it has to go
The Financial Times reported that some firms wanted the affordable homes rule to be reduced to between 10 and 15 per cent.
One senior industry source told The Standard that the final figure could be below 20 per cent – but Sir Sadiq did not want to be seen to be the politician making the decision.
“Sadiq wants to be made to do it by central Government to give him political cover,” the source said.
Sir Sadiq confirmed to The Standard that he has been taking to developers, councils and the Government about the “perfect storm facing the housing sector, not just in London but across the country”.
He hopes that a new system will be announced in the “next few weeks”.
Asked if a reduction in the 35 per cent rule was under discussion, he said the Ministry for Housing, Communities and Local Government – the department in charge of housebuilding - was “willing to talk about everything”.
Sir Sadiq added: “What I have said to the Government is: let’s have a frank conversation about what we can do. I’ll go into those conversations with an attitude of ‘nothing is off the table’.”
“It’s really important that we understand our city faces a housing crisis. That includes the fact there is an affordability crisis. Londoners have been priced out of our city for too long. We have got to increase the supply of housing in London to meet the demand.
“We have broken records in terms of homes completed, and numbers of council homes being built. At the same time, we have got to recognise that across the country, housing starts have fallen off a cliff.
“In London, what I want to do is get a bespoke agreement with the Government. That could be freeing up regulation, changing rules in relation to planning to try to kick-start housebuilding in London. It’s really important that we do that.”
Only 347 affordable homes were started across London between April and June - a fraction of the 88,000 new homes the Government says are needed each year in London.
In 2023/24 there were only 2,358 affordable starts, though this increased to 3,991 in 2024/25, according to City Hall data.
Earlier this year the mayor was allocated £11.7bn for affordable housing in London between 2026 and 2036.
The construction industry says the 35 per cent rule, coupled with safety regulations introduced in the wake of the Grenfell Tower fire and delays in the planning process, are to blame for the collapse in housebuilding.
Sir Sadiq has criticised the Building Safety Regulator for “making it harder and costlier” to build flats over six storeys.
He said too many applications had taken longer than the regulator’s 12-week timeline, with many rejected without explanation.
He told The Standard that the post-Grenfell rules, while being in place for “understandable” reasons, had affected the viability of a number of schemes in London
“Roughly speaking, 94 per cent of new homes in London are flats, but we know we have more than double the amount of high-rise buildings than the rest of the country put together,” he said.
“What I’m speaking to the Government about, after listening to developers and others, is: is it possible, in these exceptional circumstances, to try to turbo-charge housebuilding in London?
“Those conversations are ongoing, and hopefully over the course of the next few weeks I’m hoping to come to an agreement with the Government about what we can do to kick-start housebuilding in London.”
The London Plan, the mayor’s planning blueprint for the capital, sets requirements that developers have to meet in order to secure planning permission.
In 2017, Sir Sadiq introduced a “fast track route” for major developments that allowed developers to bypass “viability” negotiations by ensuring 35 per cent of the development was classed as affordable housing.
A recent report from the Home Builders Federation said a lack of support for buyers, excessive bureaucracy, unrealistic affordable housing demands and delays in getting applications approved were “strangling” attempts to deliver desperately-needed new homes.
The HBF said only 30,000 homes were completed in London in the year to June, down 12 per cent from the previous year and significantly below the 2019/20 peak.
In addition, planning permissions have fallen to the lowest level since records began in 2006, with just 966 projects approved in the same period.
The report said that Londoners face the highest barriers to home ownership in the country, with a first-time buyer would need to save 50 per cent of their income for more than 13 years to afford a deposit.
In July, Sir Sadiq said that between 2018 and 2023, schemes following the fast-track route had provided an average of 44 per cent affordable housing – about 13,500 homes a year.
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