The Government has slashed Sir Sadiq Khan’s affordable housing targets after the number of affordable homes being started in London last year was revealed to be the second lowest on record.
Construction began on a total of 3,991 properties being subsidised by the mayor in 2024/25, according to annual data published by City Hall.
This was an increase of 1,633 on the 2,358 affordable homes started in 2023/24 but is the second lowest annual total since comparative records began in 2013/14.
After publishing the housebuilding data, City Hall made the dramatic announcement that it had reached agreement with the Ministry of Housing, Communities and Local Government - headed by Deputy Prime Minister Angela Rayner - to cut the affordable housing targets Sir Sadiq has to hit by the end of the current financial year.
These targets have been reduced from starting 23,900 to 27,100 affordable homes by March 2026 to starting 17,800 to 19,000.
This is the second time that the mayor’s housing targets have been reduced - he was originally meant to start 35,000 homes over the five-year period but this was reduced to a minimum of 23,900 in 2023.
To date, only 5,188 affordable homes have been started - meaning more than 12,000 more homes will have to be started in the current financial year for Sir Sadiq to hit the target and not be at risk of having to hand back some of the £4.1bn has has received in Government housing grants.
A mayoral spokeswoman said the aim was to start at least the “mid-point” of the reduced target - about 18,400 homes.
The lower target means that City Hall will have proportionately more money available to “unlock schemes which are not progressing because of high costs”, and to encourage developers to bring forward more schemes.
The 2024/25 annual figures, published on Wednesday, reveal that not a single affordable home was started in either Bexley nor the City of London, while the number of starts in six other boroughs – Bromley, Harrow, Merton, Redbridge, Sutton and Waltham Forest – did not get out of single figures.
But there was better news in terms of the number of affordable homes completed across the capital.
There were 11,636 completions – almost 700 more than the 10,949 completed in 2023/24.
Nevertheless the low number of starts provides further evidence of the dire state of the London housing market.
Robert Colvile, director of the Centre for Policy Studies thinktank, said: “Sadiq Khan talks a good game on housing. But the tragedy for London is that it is just that – talk.
“The mayor boasted repeatedly about hitting his last target for affordable housing, in 2023. But as I and others warned, this was accomplished both by pulling forward projects from future years and an accounting trick that meant that if 2,000 homes were being demolished, and 2,200 new ones constructed, over a decade, the Mayor counted it as 2,200 new homes immediately.
“There are obviously headwinds facing the sector. But London’s housing crisis is a national emergency, and national scandal. The mayor needs to stop boasting, and start building.”
The latest figures show that in 2024/25 the completions included 6,681 social rented homes– the highest figure in a decade - and 3,690 council houses, the highest number since 2018/19, and 46 per cent more than the 2,524 completed in 2023/24.
Last week Sir Sadiq sparked controversy when he suggested easing restrictions on building on parts of the Green Belt in a bid to increase the supply of new homes.
But critics pointed out that about 300,000 homes for which planning permission had been granted had yet to be started.
City Hall says London needs 88,000 new homes a year over the next decade – not just to meet demand, but to fall in line with the Labour Government’s promise to build 1.5m homes nationwide.
London’s current target is 52,000 new homes a year - a figure it has never achieved. Hitting the 88,000 homes a year target would be more than double even the best figures achieved in the capital over the last decade.
Sir Sadiq has received £4.1bn in housing grants from the Government to subsidise the construction of affordable homes between 2021 and 2026. All these homes to be completed by March 2030.
The Centre for Policy studies said that 505 of the 6,019 homes started under the current funding period were existing properties acquired under the Mayor’s Council Homes Acquisition Programme - namely, homes that have been bought rather than built.
Tom Copley, the deputy mayor for housing and residential development, said: “The horrendous legacy of the last government, including a lack of national funding, high interest rates, spiralling building costs, delays from bodies like the Building Safety Regulator and the lasting impact of Brexit has made it harder and more expensive to build homes, with Londoners suffering the consequences.
“Sadiq has made tackling this crisis a priority since he took office, and despite these challenges the highest number of affordable homes for social rent in a decade were completed last year. While affordable housing starts also have suffered from a challenging economic context, we are seeing green shoots of growth, with a rise of almost 70 per cent in the last year.
“The decision to adjust our Affordable Homes Programme 2021-2026 targets will enable us to support partners to build at scale and deliver the maximum number of social and affordable homes in this programme.
“The Mayor is taking the hard decisions to improve housing supply of all tenures. He is actively exploring releasing parts of London’s green belt for development, and is working closely with the Government to resolve issues like delays from the Building Safety Regulator. We continue to work with Ministers to turn this crisis around and build a better, fairer London for everyone.”
Lord Bailey, housing spokesman for the City Hall Conservatives, said: "Khan has achieved another low year of housing delivery in London, the second worst on record. It's worrying that as Londoners need affordable housing he as their Mayor still cannot provide it to them.
“He's failed the people of London who are paying high rents and who are in desperate need of social housing, not to mention those who are stuck in temporary accommodation. He must do more to correct his record of low performance, by supporting councils across London to deliver more desperately-needed housing."
Hina Bokhari, leader of the Lib-Dems on the London Assembly, said: “This is yet another damning indictment of Mayor Sadiq Khan's failure to address the capital's housing emergency.
"After nine years of Khan’s leadership, Londoners deserve results not rhetoric. London Liberal Democrats have consistently advocated for a comprehensive approach that would create a London-wide Housing Development Company to accelerate construction, work collaboratively with councils to build homes faster, and release more land owned by TFL and other public bodies.”
Alice Roberts, of CPRE London, said: “Admirable though the efforts are to replace social housing, these numbers are not nearly high enough to replace those social-rent homes lost under the Right to Buy scheme, and ensure we have enough stock to manage waiting lists which is some parts of London are over 50 years.
"Much more funding will be needed to ensure new build, or buy-backs, of social homes can happen at the rate needed to get people out of temporary accommodation and into a safe and secure home.”
