House Building: London
(1 day, 7 hours ago)
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Mr Louie French (Old Bexley and Sidcup) (Con)
I beg to move,
That this House has considered Government support for housebuilding in London.
It is a pleasure to serve under your chairmanship, Mr Mundell. I thank all hon. Members who enabled me to secure this important debate. It could not be more timely, as house building in London has collapsed. In the first nine months of 2025, construction began on only 3,248 homes. Molior London predicts that just 9,100 homes will be built across 2027 and 2028—that is under 5% of the Government’s target for London. London is supposed to deliver more than a quarter of the Government’s 1.5 million homes target, but given the construction slowdown, that target appears to be dead in the water. That is the inevitable consequence of the Mayor of London’s disastrous London plan and the Labour Government’s anti-growth policies.
Three things have gone wrong. First, Sadiq Khan’s London plan has comprehensively failed to get London building. With more than 500 pages and 123 planning policies, the London plan makes it more complex and expensive to build in London. A 2024 review found that it takes seven weeks longer to determine major planning applications in London than in the next four largest cities. Sadiq Khan’s planning requirements also add to the cost of building in London. For example, the London plan goes beyond the national energy requirements, imposes carbon targets, and has policies on overheating and energy statements. Whatever the merits of those policies, they all add to the cost of building homes. In places, Sadiq Khan’s planning policies actively restrict house building. For example, the London plan effectively bans house building on large swathes of industrial land, often within walking distance of public transport.
Wendy Morton (Aldridge-Brownhills) (Con)
My hon. Friend is painting a really bleak picture for London. Does he agree that to build the homes that we need in this country, we should focus not only on increased density in our city centres, but crucially on brownfield sites? We are not seeing from the Government a determined brownfield-first approach to housing that would protect the green belts surrounding our towns and cities.
Mr French
I agree that we should have a brownfield-first approach, seeking to protect our green belt and countryside wherever possible. I understand my right hon. Friend’s concern and her representations on behalf of her constituents.
The Home Builders Federation warns that the London plan’s net zero requirements are imposing carbon offset payments of £3,000 a home. Even when building on brownfield land is allowed, it is fraught with problems. The mayor requires 50% of homes to be affordable, which, given the remediation costs on those sites, makes development unviable. Altogether, the London plan review in 2024 found that Sadiq Khan’s policies frustrated, rather than facilitated, development on brownfield land. That is why it is so disappointing that the Government stopped the mandated partial review of the London plan a year ago, saving their mayor’s blushes.
Secondly, Sadiq Khan’s affordable homes target has made many housing projects unviable in London. By demanding that 35% of homes built privately are affordable, he has made house building unviable in London.
Fleur Anderson (Putney) (Lab)
The hon. Member is painting a picture that I do not recognise in my London constituency. Is he aware that, as Mayor of London, Sadiq has averaged 10,000 more new homes completed a year than under Boris Johnson’s mayoralty? He has got house building going in a way that the Tory mayor could not.
Neil Coyle (Bermondsey and Old Southwark) (Lab)
My intervention is similar. Under Sadiq Khan’s period in City Hall, there have been 8,236 Greater London Authority-funded affordable starts in my borough of Southwark, including 636 completions in the last year. That somewhat contradicts the hon. Gentleman’s statements. Rather than trying to pin it on the mayor, could it be that the hon. Gentleman’s council is failing on this front? Perhaps we could be working together, rather than trying to pin it on one man.
Jim Shannon (Strangford) (DUP)
I commend the hon. Gentleman for securing the debate; he is absolutely right to underline this issue. Older couples whose families have flown the nest want to downsize but cannot find an affordable house in a suitable area, and that problem is replicated throughout the United Kingdom. Does he agree that that is a critical factor in sorting out affordable housing provision in London or, indeed, anywhere?
Mr French
I absolutely agree, and I appreciate the hon. Gentleman making one of his well-respected interventions in this important debate. We have to make sure that across the country, we are building the homes that people want to live in and that people can afford, including people in older age.
Demanding that 35% of homes built privately are affordable has made house building in London unviable. The higher 50% target for industrial land also applies to public land, which, again, has effectively blocked development in the capital. This policy may seem like a good way to get London building more social housing, but it has hugely backfired. The policy is effectively a tax on house building. It makes some development unviable and deters investment. It ultimately means fewer homes and higher costs. If a developer cannot afford the target, they face six burdensome checks on the project’s viability before, during and after construction.
Wendy Morton
The key thing is that until the Government recognise that they need to put some support into brownfield regeneration, our green belt and our green spaces will always be under threat.
Mr French
I absolutely agree. We need to unlock brownfield sites in the interests of current and future generations that want to own a home.
If there is any surplus profit in the situation I was describing, the developer will lose it, but if they make a loss, the number of affordable homes required will not be reduced. For a decade, London Conservatives have warned that this policy will harm house building. Today, we see the consequences. Sadiq Khan’s failed London plan has created a perfect storm, compounded by failing demand, policy costs and regulatory delays.
Andy Slaughter (Hammersmith and Chiswick) (Lab)
Will the hon. Gentleman give way?
Mr French
I am going to make a bit of progress, because I have been up and down quite a lot, and I am not fit enough to keep doing it.
Under this Labour Government, more and more first-time buyers are unable to afford a home, and they are the primary market for new builds in London. Over 3,700 new homes are sitting unsold. This is not a market where developers will build more. The Labour Government were wrong to slash first-time buyers’ stamp duty relief, costing first-time buyers up to £11,250 more in taxes. That is why the Conservatives’ plan to abolish stamp duty is the right one, and the Labour Government must rule out further market-suppressing tax rises.
Developers also face excessive policy costs—section 106 payments, community infrastructure levy payments, mayoral community infrastructure levy payments, carbon offset levies, biodiversity net gain requirements and the new building safety levy. The collective cost of those demands makes it too expensive to build. To make matters worse, on top of the burdensome London plan, the well-intentioned post-Grenfell Building Safety Regulator is now delaying building in the capital. It has rejected 70% of building safety designs, and some completed projects have had to wait 18 months for approval before people can move in.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
I am grateful to the hon. Member for giving way. I have listened carefully to his analysis of the problem—I have waited to hear the full analysis—and I would be grateful for some reflection on why the deregulatory proposals he is making were not brought forward under the previous Government when there was clearly an opportunity to do so.
Mr French
I appreciate the argument the hon. Lady is trying to make, and I am about to come on to some suggestions to hopefully help the Government.
The mayor has had strategic planning powers in the capital for nine years, and he was awarded £9 billion of affordable homes money by the previous Government. We have to be clear about where blame in the capital lies.
Rachel Blake
I am listening to the hon. Gentleman’s argument about strategic planning, but I believe every Member present, including myself, has substantial experience in bringing forward new genuinely affordable homes. We all know that it requires finance and real delivery focus, particularly in local authorities. Can the hon. Gentleman reflect on his time in local government and how many genuinely affordable council homes were brought forward in that period? Obviously, the ability to deliver from a council setting is a key part of solving this important challenge for London.
Mr French
Again, I appreciate the point that the hon. Lady is trying to make. I have already outlined the Bexley position in response to the hon. Member for Bermondsey and Old Southwark (Neil Coyle), so I do not need to go back into that—Bexley has been delivering affordable homes.
What can be done now? I am afraid that the recent measures announced by the Government and the Mayor of London—without consulting London’s 32 boroughs—to unlock house building are too little, and potentially too late. They will give developers only temporary, targeted relief from the community infrastructure levy on brownfield sites, but not from the more expensive mayoral levy. The changes to the affordable homes targets do not go far enough; at 35%, demand is still placed on industrial and public land, acting as a blocker on these sites that could host thousands of homes. While a temporary fast-track route for homes that provide 20% affordable housing is welcome, it is a minor amendment to a system that has ultimately failed.
More concerning are the proposals to give the Mayor of London the power to call-in applications for 50 homes or more and for developments on green belt and metropolitan open land. It is undemocratic to withdraw planning powers from local communities. It will backfire, eroding the little remaining public trust in the Greater London Authority, and it will confirm to outer Londoners that Labour’s plan is not to unlock building on well-connected brownfield sites, but to concrete over our precious remaining countryside.
Andy Slaughter
The problem I have with the hon. Gentleman’s speech is the implication that the Conservatives are in favour of house building, particularly affordable house building. I had the dubious distinction of having a Conservative council for eight years, which typically asked for 0% or 5% of homes to be affordable, and the Conservative Government’s permitted development rights meant that commercial property could be transferred into residential property with no affordable housing at all, even on major and important sites. Is that not the legacy of the hon. Gentleman’s party?
Mr French
I disagree with the hon. Gentleman, but I understand the argument that he is trying to make. Ultimately, my position is that the way to get truly affordable homes is not by setting artificial targets; it is by building more homes across London. That is how we bring prices down and unlock home ownership for more Londoners across the capital.
Why should Sadiq Khan, who has comprehensively failed to get London building, be given more powers? As I have outlined, his London plan has made it too difficult and complicated to build in London, and as a result, Londoners face higher rents and unaffordable housing prices. Now he wants to build on the green belt, while brownfield sites near tube stations sit empty. This is completely unacceptable.
Sadiq Khan and the Labour party may boast about his house building record, but the reality is that four fifths of the homes that were built in London last year received planning permission under Boris Johnson. The same is true of the majority of homes that were started last year—they were approved under Boris Johnson, not Sadiq Khan. We are nine years into Sadiq Khan’s mayoralty, and his predecessor is still building or unlocking more homes than him.
The answer is not to build on the green belt, and it is not to let houses in multiple occupation conversions run wild or to take more powers away from local communities. It is to make it easier and cheaper to build in London again, and that means scrapping Sadiq Khan’s failed planning policies. Home ownership should be a dream that is open to everyone, but in Sadiq Khan’s London it is frankly not. It is a moral imperative that the Government step in to fix his mistakes.
Several hon. Members rose—
David Mundell (in the Chair)
I am going to impose an informal five-minute limit, and we will see how we get on.
Apsana Begum (Poplar and Limehouse) (Lab)
Over the past years, I have been working with constituents and campaigners who have long been concerned about ongoing disempowerment in planning and development processes, and deregulation of the building and developer industry. Londoners and my constituents have been priced out, with increasing gentrification and affordable homes that are not only in shortage but all too often just not affordable. That is the legacy of the previous Tory Government and their previous Tory Mayor of London, Boris Johnson.
That is why I warmly welcome the Renters’ Rights Act 2025, a much-needed law to increase tenants’ protections against unscrupulous and rogue landlords. That is also why I am concerned about the announced changes to affordable housing delivery in London, which will mean that developers can get fast-tracked planning permission for developments with just 20% affordable homes, compared with 35%, as had been the case for numerous years. I understand that the policy’s intention is to speed up the delivery of house building in London, but at what cost?
For so many across London, including in my constituency, the 35% requirement was seen to be an injustice, in and of itself, that contributes to sustaining the housing crisis across London, with rising rates of homelessness, insufficient social housing, soaring rents and associated poor-quality housing. The announcement that the requirement will be reduced to 20% therefore feels like adding insult to injury. Constituents see no benefit to them, but more profits for developers, at a time when London is experiencing record levels of homelessness. Shelter has said that more than 97,000 children are homeless in temporary accommodation, as I know acutely from my constituency casework. The demand for social rent homes is at an all-time high.
In asking questions to the Minister, I recognise that all that reflects the legacy and record left by the Tory party in government, but what alternative solutions to delivering social housing have been considered? Will there be any assessment of the impact of the 20% requirement on social housing supply in London? Importantly, how will social housing commitments in existing planning permissions in London be safeguarded and maintained to ensure that there is no reduction in the delivery of the social housing that Londoners need, in particular where developments are already approved? That is especially important in my constituency, where there has been a considerable delay to the Chrisp Street redevelopment plans. I am concerned that targets and previous commitments may not be honoured.
It is my strong view, and the view of constituents who have contacted me over the years, that development should be focused on solving the existing housing crisis and be driven in the interests of local people. Rather than relying on developers and lowering ambitions on social housing, the priority in London ought to be increasing direct investment in social housing, particularly council housing, for the present as well as the future. Housing is a right, and we must all have safe, affordable and secure housing. We need investment and empowerment in our communities, and to resolve the housing crisis we need a mass building programme of social and particularly council housing.
Bob Blackman (Harrow East) (Con)
It is a great pleasure to serve under your chairmanship, Mr Mundell. I salute my hon. Friend the Member for Old Bexley and Sidcup (Mr French) for initiating the debate.
The debate is timely given the decision last week, by the Government and City Hall, to lower targets for affordable housing in developments, in exchange for the granting of supposedly faster planning permission. That is a real concern. The briefing that we have received from Crisis demonstrates that more than 13,231 people were rough sleeping in London during the last year—a record high and a 10% increase on the previous year. Some 70,000 households, including 90,000 children, are in temporary accommodation. Not only is that bad for the families, but it is costing Londoners and the taxpayer something like £5 million a day in London. In particular, money is being spent on bed and breakfast accommodation, which is not only unsuitable for families but expensive for London authorities to bear. There are 336,366 households on social housing waiting lists in London. The crunch is whether this decision is actually going to deliver any improvement in social housing.
Before anyone starts talking about the previous Government or the former Mayor of London, Boris Johnson, I remind hon. Members, particularly newly elected Labour Members, that I tried to carry through a Bill on behalf of Boris Johnson to increase house building in London. We were blocked by the right hon. Member for Hayes and Harlington (John McDonnell), the hon. Member for Hammersmith and Chiswick (Andy Slaughter), who is no longer in his place, and the hon. Member for Islington—I am not sure which.
Bob Blackman
No, the other one: the right hon. Member for Islington North (Jeremy Corbyn). That meant that whole sites in London were not developed to provide housing when they should have been.
Clearly we have a serious problem here. In my constituency, there is a planning application that has been outstanding, after having been reviewed at various times, for nearly 10 years. It would provide housing units that we desperately need, but the housing association refuses to develop it. It is now trying to sell the site again to further developers.
Our other problem in London is where developments have taken place. There have been developments such as Battersea power station, around Wembley stadium and other areas where housing has gone up, but that housing has not been sold to local people; it is been sold to developers or owners abroad, then rented out at exorbitant cost to local London people, who then have to apply for housing benefit and depend on welfare payments rather than having a home of their own. We have to conquer this.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
The hon. Gentleman made a very good point about overseas sales, although I would contest his statement that people are having to receive housing benefit to live in many of those developments because, as he probably knows, they are advertised overseas by yield. We are seeing homes in London as financial investment vehicles for people who have no connection with this country. Many of those landlords have never even visited the property. What would his party’s policy be to tackle this issue?
Bob Blackman
I do not speak on behalf of my party; I speak on my own behalf. As the hon. Lady well knows, I have been promoting building 90,000 socially rented homes a year across the country, and for the past 30 years Governments of all persuasions have failed to build the homes that we need at the prices that people can afford.
The sad reality is that we have to look at how we are going to deal with this. We could deal with the Transport for London land. TfL owns huge amounts of unused land that could be developed for housing, and that could be done in co-operation with City Hall, but the sad fact is—[Interruption.] Government Members need to focus on this: not only was Sadiq Khan as mayor given the money that my hon. Friend the Member for Old Bexley and Sidcup mentioned, but he returned it to the Treasury; he could not spend it because he could not get development under way.
We have to look at what we are going to do across the House to make sure that houses are being built in London. I hope that we are not going to reduce the safety requirements for these buildings. That would be a disaster—we know of the terrible tragedy that happened in Grenfell. We should not even contemplate moving away from what has been done to protect people. Lessening those protections would be a mistake in many ways.
I have a couple of questions for the Minister. How are the Government going to ensure that the affordable homes that we need in London are provided when the restrictions have been removed and developers are therefore less likely to build affordable housing that we need? Before agreeing to this decision, what assessment has the Minister made of the impact it will have on those on the affordable housing waiting lists in London? That is a real crisis, and London councils right now are in desperate need of more finance to build more housing. There are possibilities to develop the brownfield sites that TfL and the Government own, but that is being restricted. There is a solution that we could advance. We hope the Government and the Minister, who I have a lot of respect for, can influence the Mayor of London to make that happen.
Emily Thornberry (Islington South and Finsbury) (Lab)
I begin by congratulating the hon. Member for Old Bexley and Sidcup (Mr French) on getting this slot. As he can see, the subject is close to the hearts of so many of us; more importantly, it is close to the hearts of our constituents.
In Islington, those who want affordable housing have to have social housing. Nothing else works. In Islington, we therefore need to have a policy to maximise social housing. People can rent privately, but the only way they can afford to rent privately is by renting out one room each: that means having a single person sleeping in the sitting room, and other single people sleeping in the bedrooms. We have lots of large, dark, sad tower blocks that were built under the Liberal Democrats, which have been bought for investment purposes and are not used. Their lights are off at night, nobody is on the voter register —they are just there, and they laugh at the 17,000 people on the waiting list in Islington who desperately need social housing. Those are Islington people who want to live in Islington, and there is no space for them.
Frankly, politics in Islington begins and ends with housing. We have some very rich people, some lucky people and some very poor people in Islington, but moving to Islington is impossible for an ordinary person. We have a vibrant community. We are a tiny community—Islington is one of the tiniest boroughs in Britain. Let me give hon. Members some stats about it: Bexley borough is four times bigger and Bromley borough is ten times bigger than Islington. The Minister is likely to say that 20% of something is better than 35% of nothing. I get that, but I do not think that one size fits all, particularly in little brave Islington.
Since the current Chief Secretary to the Treasury was in charge of housing in Islington, we have had a policy that 50% of all new developments need to be affordable. We say to the developer, “Fine. The land is expensive. You’re going to make a killing on the flats that you build. But half of them have to be for local people, which means that they have to be affordable, which means they have to be social, because nothing else is affordable in Islington. We will let you have half, but half of it has to be for us, and that is how it is.”
We have been doing that, and it has not meant that we have got nothing. Since 2020, seven schemes have gone through in Islington, which has resulted in nearly 1,000 affordable homes. That may not seem like a lot, but it is in somewhere as cramped as Islington where the opportunities are as few as we get. I have the least amount of green space of any MP in the whole of Britain. I have 120,000 people crammed into the seventh smallest constituency in the country. We have 15,000 people per kilometre. Our opportunities for development are limited.
I appreciate that it has recently become more difficult for local authorities to build by themselves, but until recently the joke was that if someone left their garage in the morning to drive to work, by the time they came back the local authority would have built a flat there. It is a political and social imperative to build as much housing for our people as we possibly can, and that is what we want to do. Unlike the Bromleys and the other boroughs, we have only little infill sites. We do not have big developments. Please do not give everybody instructions to do exactly the same thing because that is not going to work.
I ask that we look at what can be achieved and allow Islington to continue to insist on 50% so that when we do get our tiny little sites available for development, we can say to a developer, “You are very welcome. Welcome to Islington. We are headbangers. We have 17,000 people on the waiting list. You have to build half of it as affordable housing. You know that because we have been saying it for 15 years and we will continue to do so.” We would rather the Government did not undermine that so that we can continue to do it.
It is more difficult to get those developments, and it may be that those sites will take a bit longer to be developed. However, we would rather such tiny sites as we have be developed for social housing and local people and take a bit longer to develop than yet another great big tower block that is empty, dark and owned by people in China who have decided to build to buy a flat in Islington instead of a gold bar. That is the reality of housing in Islington.
I know that the Minister knows what I am talking about. I know that he is very thoughtful and an absolute expert in housing and wants to do exactly what we want. We know that the housing crisis can be solved only by building more housing. Absolutely—he has my full support on that. But we need to have housing that local people can live in. The reality of the economy in central and inner London is that we must have affordable housing. Otherwise people will continue to come.
Whenever I speak about housing in Islington, I try not to cherry-pick; I just talk about the last time someone spoke to me about housing. Someone spoke to me about housing on Saturday. I knocked on their door and there was a terrible noise. There was a child in the corridor screaming and screaming. Mum had her headphones on because the child is clearly autistic. She came to the door and said, “Emily, I’ve been to see you so many times and you just cannot get me rehoused, can you? There’s five of us in this one-bedroom flat.” That is the reality. That is why we have to build more social housing in Islington. That is how people live, and it is wrong. Our absolute priority must be to build more homes that families like that can live in.
David Mundell (in the Chair)
I call Peter Fortune, who I am sure will stick to the five-minute limit.
Peter Fortune (Bromley and Biggin Hill) (Con)
Of course I will, Mr Mundell. I thank my hon. Friend the Member for Old Bexley and Sidcup (Mr French) for securing this debate. I also thank my hon. Friend the Member for Harrow East (Bob Blackman) for his excellent speech, much of which I agreed with, especially about using the TfL space.
The TfL chairman is Sadiq Khan and, as Mayor of London, he is responsible not only for TfL but for house building in London. If we look at some of his promises in 2016, he said his first priority would be tackling the housing crisis. His first manifesto promised a step change in new housing supply, and that 50% of new homes would be affordable. Here we are nearly a decade later, and he certainly has not delivered that step change. House building has in fact ground to a halt—it is down 73% in London over the past year. The Government have had to step in to water down City Hall’s anti-growth affordability targets, because there is no way of avoiding it: despite Sadiq Khan’s boasts, he has comprehensively failed to build. After nine years at the helm, Sadiq Khan has nothing to show for it. Four fifths of homes built last year, as previously mentioned, were approved under Boris Johnson’s mayoralty. The average home in London cost £483,000 in 2016. Today, it is about £560,000. The average rent cost £1,292 per month in 2016. Today, it is £2,252.
As has been discussed, it is not a question of money: Sadiq Khan has been given nearly £9 billion to deliver on housing in London. It is not a question of powers; he has strategic planning powers in London. Instead, it has been about bad policy. His London plan is onerous and expensive to adhere to, and his affordability targets have acted as a tax on house building. The Government know this. Instead of addressing the problem, they are dancing around the issue. They scrapped a mandated review of the London plan after independent experts found it to “frustrate rather than facilitate” building on the brownfield sites that my hon. Friend the Member for Old Bexley and Sidcup discussed.
The Government have cut the community infrastructure levy but kept the more expensive mayoral levy. Instead of taking powers away from the failing mayor they are rewarding him, giving him power to call in developments of 50 homes on green-belt sites. Instead of removing the obstacles to building on brownfield sites they are weakening green-belt protections.
Wendy Morton
My hon. Friend speaks passionately about this, but does he not agree that this absolutely shows the problem with centralising not just targets but powers in the hands of one person—the mayor or a combined authority? We need much more involvement of local communities, and we need councils to have a greater say on planning matters.
Peter Fortune
I agree with my right hon. Friend. It is worth re-emphasising that the mayor has had responsibility for delivering housing in London for nine years and has fundamentally failed to deliver on his promises.
On weakening green-belt protections, which matters so much to those of us representing outer London boroughs, it is a bizarre decision to effectively block building on vacant former industrial sites in inner London near tube stations, as was mentioned by my hon. Friend the Member for Old Bexley and Sidcup, and instead force thousands of homes on to poorly served farmers’ fields in Bromley. If the Government want to meet their housing targets, they need to realise that Sadiq Khan is not a builder—he is a blocker, and the record proves it.
Danny Beales (Uxbridge and South Ruislip) (Lab)
It is a pleasure to serve under your chairmanship, Mr Mundell. I thank the hon. Member for Old Bexley and Sidcup (Mr French) for securing this timely debate about Government support for house building in London.
House building is vital for growth, jobs and many businesses in our communities, big and small. However, it is much more than that, and we have heard from other hon. Members the testimony of constituents struggling with a broken housing system. When one in 50 Londoners is now in temporary accommodation, increasing to one in 21 children, that is a national scandal and requires urgent, emergency action.
I grew up in temporary accommodation—in bed and breakfasts and hotels—and know what that means. It is not just a statistic; it is not just a temporary house. It is a completely different life. The impacts for many can be quite scarring on their future. I welcome the Government’s sense of urgency in tackling this after 14 years of failure in the housing system.
Emily Thornberry
I did not know that about my hon. Friend, and I find it very interesting. Many of us who speak with passion about social housing do so because we grew up in social housing. I was saved because my family were made homeless and we were given a house by the council. My worry is that if a family made homeless come to see me now, their chance of getting a house from the council is vanishingly small.
Danny Beales
I thank my right hon. Friend for that contribution. It is true that many of my constituents tell me the story of turning up at the civic centre with a plastic bag of their belongings to be told there are no homes in Hillingdon. The best they can expect is temporary accommodation, often in communities far away, with no chance of returning.
The implications are significant: missed school opportunities, not being able to get to health appointments, and not keeping a job. Thousands of families are now being affected. There is also a financial impact on the local authorities in our constituencies: £5 million a day spent on temporary accommodation. The London boroughs’ homelessness budget was overspent by £330 million last year—double the previous year.
Let us be honest: the housing system in London isn’t working for anyone, whether a mortgage payer or a leaseholder. We have all heard the horror stories of increased mortgage payments since the Liz Truss mini-Budget, increased service charges and woes, first-time buyers locked out of the housing market, and private renters struggling with exponential rent increases.
I see social cohesion issues increasingly come to the fore in my borough. At the core, people feel that housing is increasingly inaccessible in the communities where they have grown up. That is not because anyone else is getting a council home, because they are not; it is because of a broken housing system that has not been fixed for decades. At the same time as increasing need, the rate of build-out with planning permissions has dropped to 10%. Thousands of homes are stalled; there were only 80 housing starts in Hillingdon in 2024-25. Whether it is the St Andrew’s site in Uxbridge, a concrete shell of a building laid derelict for two years, or the Morrison’s site in Yiewsley, also left derelict for years, with the council not determining the application, there is a need for urgency and action.
To move forward, investment is vital. We often talk about how expensive it is to act on housing. The truth is that we have spent a lot on housing but spent it in the wrong place. We have subsidised private landlords to the tune of many billions of pounds through housing benefit payments for years. It is right that the Government are shifting investment into the delivery of new homes. The record £39 billion investment, including £11 billion for London, is long overdue. When colleagues and I were building council homes, we were desperate to see such investment from the previous Government. Multi-year funding, stability and certainty on rent levels are also important steps forward.
I disagree that the mayor’s having powers on planning, and intervening in the local decision-making system, is wrong and to the detriment of house building. My borough —Tory-run Hillingdon—has one of the lowest levels of approval for housing delivery in the past 10 years: almost 50%, with one in two applications rejected. No wonder we have such a housing crisis in Hillingdon, when the local authority has not only failed to deliver itself but failed to support the private rented sector to deliver, too.
I welcome the Government’s commitment to reform the Building Safety Regulator, which was touched on quickly by Opposition Members. The introduction of the Building Safety Regulator and regime, although good in spirit, has been a disaster in practice. It has overwhelmingly clogged up the system of housing delivery. We had a debate here on that a couple of weeks ago, and I welcome the Government’s acceleration of reforms in that space.
To sum up, I fully support the Government going further and faster in their approach to delivering house building and unblocking the planning system. We need an interventionist approach from the Department where schemes—particularly large ones—are blocked and clogged up in the planning system. I would support the Department’s calling them in; referring them to the mayor or the Department; taking action to de-risk brownfield sites; and supporting developers to unlock blocked or half-delivered schemes. Londoners desperately need more genuinely affordable homes to buy or rent. I support the bold measures that the Minister and the Government have already taken. They have my full support in going further and faster.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
I congratulate the hon. Member for Old Bexley and Sidcup (Mr French) on securing this debate on such a vital issue. I echo many of the points made by my right hon. Friend the Member for Islington South and Finsbury (Emily Thornberry). Her neighbouring constituency now includes a ward that used to be in my constituency—a ward where house prices are reaching £2.5 million to £3 million in some cases. That is one end of the scale.
At the other end of the scale we have a homelessness situation that is intolerable, with thousands of people on the waiting list. Exactly as my right hon. Friend said, every week I visit people in their homes, which is something that MPs do. We see people where they live, with the problems they have: triple bunk beds with little space for the third child to get into bed; five people in a room; and toddlers with no space to run around. I could give a different example every week, but a real one. This is what we need to resolve, so I welcome the Government’s plan to build more homes.
There are a lot of challenges. The right hon. Member for Aldridge-Brownhills (Wendy Morton) mentioned the “brownfield first” approach as a priority. There are plenty of brownfield sites in my constituency. I say “plenty” but, like the constituency of my right hon. Friend the Member for Islington South and Finsbury, my constituency is very small in relative terms but expensive to build on.
House prices in Hackney are 18.5 times average income, so all the young professionals who might want to get on the housing ladder are stuck in shared accommodation, as my right hon. Friend the Member for Islington South and Finsbury said, and families are stuck in social housing, crowded and unable to go anywhere else because they cannot afford private rent, which gives no security anyway. Homeless families are increasingly in hostels for years. Only six years or so ago it would have been about six months before people had a chance of getting some sort of property, and now people are being moved out of the borough, wrecking their lives and opportunities.
We have 3,400 homeless households in temporary accommodation, which is a big issue for us all and costs the taxpayer a lot of money. It does damage to the families and the children’s opportunities. It breaks our communities, and all taxpayers have to fund that, so we need to resolve it. We have a total of 8,500 households on the council’s housing register, and the notional wait for a three-bedroom property is over a decade—it is a nonsense wait, because by that time the children have grown up. Around 44% of Hackney residents live in social housing. We have more private renters than homeowners and that level of social housing residents. Even though house prices are going up for some, the housing situation is worsening for many others.
Hackney council has been great at delivering properly affordable social housing. Affordable homes, which include both social rented and intermediate, make up 57% of council housing-led delivery. In crude terms, if Hackney council wants to build a home because of the land value, which I will touch on, it has to build one for private sale to pay for the one that is for intermediate or social rent. When I say to people, “We are working hard to get you a house,” they look at the houses I am pointing to on the neighbouring bit of land and say, “Will I get one of those?”, and I cannot, hand on heart, say that they will within any reasonable period of time. The devastation this is having is surely feeding into our special educational needs and health crises. It is just not long-term sustainable.
Since 2022, the current council period since the last council elections and between now and next April, 956 council homes for social rent have been in design, planning or acquisition or under construction. It is cheaper to buy back a leasehold property on a council estate than it is to build new, because it costs £450,000 in Hackney to build a new social rented home. It is no wonder we are having challenges delivering and no wonder that the Government and the Mayor of London are trying to work out a way to get more homes built. If they are all for private rent, we are going to exacerbate the problem, so we need to work that out. Construction costs are now around £5,000 per square metre compared with £1,000 to £1,500 a decade ago. That is being led by a number of issues globally, including Brexit, but this is the reality we are dealing with. When I looked at this in my previous role on the Public Accounts Committee, the Government’s own figures showed—I am sure the Minister is aware—that bricks and mortar subsidies offered the best value for money for the taxpayer to try to resolve the problem.
We need things not just on brownfield but on grey belt. I do think that the green belt has some grey belt —we need to be realistic about this. Bits of old car park that no one is using could be turned into homes. We need to be creative when looking at this.
Wendy Morton
The hon. Member makes a really important point about grey belt. I completely understand her example of a car park, but grey belt needs much clearer definition, because we are seeing cases of development that inspectors are now saying is grey belt when it is actually greenfield, and that is really damaging to our communities.
Dame Meg Hillier
That is a fair challenge, and I am sure that the Minister will pick that up. It is important that we all know where the goal posts are.
I would like to ask the Minister about the release of public land. This is something that I have looked at over the years. Whether it is the Ministry of Defence, Transport for London or the Department of Health and Social Care, the Treasury has, over many Governments, insisted that that money goes back to the Department. On one level, that is completely logical, but looking at hospitals or schools, if that land could be used for housing, it would help teachers, nurses or doctors to live locally.
Munira Wilson (Twickenham) (LD)
I have long campaigned on that issue. I have a disused police station in my constituency, in Teddington, and we want to turn it into a GP surgery and social housing. I tabled an amendment to the Planning and Infrastructure Bill to ensure that public sector sites are redeveloped for public good. Unfortunately, I have had no response from the Minister. Does the hon. Lady agree that that would be a good amendment to make?
Dame Meg Hillier
I hear what the hon. Lady says, but I also recognise that there are financial challenges with the Treasury signing a fairly blank cheque to say that all public land could become housing. We need to be creative about this, and that is where we need a mixture of local knowledge and some flexibility from the Treasury. For example, the change of use of school sites was quite gummed up in the Department for Education under the previous Government. We need to make sure that any change of use can be dealt with relatively quickly. It will be better for health and education outcomes if we use that land for other things.
We need a national mission on housing, and I applaud the Minister for leading on that. Does he have any plans to limit further overseas purchasers buying these properties? It is great for developers, because they get that cash in, but we need to prioritise local people, and tax does not seem to be doing it. Does he have any thoughts about restricting Airbnb? I know well the blocks that my right hon. Friend the Member for Islington South and Finsbury was talking about, because during covid, people paid rent to go to those places to isolate, but they were not proper homes. That is having a devastating effect on school numbers across London. Could the Minister look at the costs of building? The long-term costs of not doing it will be enormous, and we need to support those families who desperately need social rented housing.
David Mundell (in the Chair)
I ask our last three speakers to stick to their five minutes.
Mr Calvin Bailey (Leyton and Wanstead) (Lab)
It is a pleasure to serve under your chairship, Mr Mundell. I thank the hon. Member for Old Bexley and Sidcup (Mr French) for securing this important debate. Few issues affect Londoners more directly than the shortage of decent and affordable homes. I want to begin by talking about one of the clearest symptoms of that shortage: the rising cost of temporary accommodation. In Waltham Forest, the net overspend on temporary accommodation this year alone is £14.3 million. In my constituency, 7,300 applicants sit on the housing register, and the average wait for homes is irreconcilable—10 years for a three-bedroom home, and 14 years for a four-bedroom home. In neighbouring Redbridge, 3,000 families sit on the temporary accommodation register, and a wait for a three-bedroom home is 18 years, which is the lifespan of a child.
Behind those numbers are people. One of my constituents, a mother and a nurse, has been without a stable home since she was 13. For 20 years, she has moved between insecure rentals and temporary housing, despite working as a public health worker and a nurse, and caring for a child under treatment at Great Ormond Street. She faces eviction, instability and anxiety, all because of a shortage of social housing. That is what the housing crisis looks like for humans. The slowdown in house building has tightened competition for homes, driven up prices and pushed councils to rely on hotels.
The causes are many: the lingering impact of the pandemic, high interest rates since the 2022 mini-Budget, Brexit-related labour shortages, soaring construction costs, and the new fire safety and building regulation requirements. I therefore welcome the agreement by the Mayor of London and the Government to boost house building, which includes a £322 million injection from City Hall in the form of a developer investment fund, which will leverage private capital, and a wider £11.7 billion from the social and affordable homes programme, with low-cost loans from the national housing bank.
We must face the scale of the problem. London councils are trapped in a vicious cycle of rising costs while funding to cover them stays static. Councils even outbid one another for the same limited supply. Many constituents are now housed far outside their own boroughs—we read about that today in an article about Waltham Forest.
The situation is worsened by competition with the Home Office, which also relies on temporary accommodation for asylum seekers. The bidding war benefits a handful of landlords but leaves councils and communities footing the bill, and people from within our communities are sent outwith them. A constructive answer would be to re-establish co-ordination between the Home Office and London Councils, reinstate a cap on bids or prioritise boroughs with the greatest need. I therefore welcome the Home Office’s commitment to develop a more sustainable model of accommodation, but it must go further by reducing competition and expanding supply to restore fairness and stability to local housing markets.
Councils are not only victims of the crisis, but essential partners in solving it. Redbridge is delivering 600 council homes through its own affordable homes programme, and Waltham Forest has bold regeneration plans, particularly at Avenue Road and Montague Road, which I have spoken to the Minister about previously. At Avenue Road, the council could deliver 617 new homes, including 242 for social rent. Montague Road would add 223 new social homes and about 200 additional properties. That is more than 1,000 new homes in total, which would improve the lives of the wonderful community that lives there at the moment.
But like many London schemes, those have stalled. Across the capital, 111,000 homes are paused, and the rate of converting planning approvals into completions is below 10%. That is why our Government’s intervention is vital. It will not override local councils but empower them. Our Labour councils have a strong record of innovation, using infrastructure, finance and land value capture to support house building as part of the regeneration. With modest, well-targeted funding, Waltham Forest could unlock more than 5,000 new homes through estate renewal and redevelopment in underused sites.
David Mundell (in the Chair)
Order. I have to draw you to a close there, Mr Bailey.
Rachel Blake (Cities of London and Westminster) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Mundell. I commend the hon. Member for Old Bexley and Sidcup (Mr French). Although we probably disagree on both the analysis and the solutions, I recognise his passion for his constituency and his concern about the issue in London.
In Cities of London and Westminster, which I am proud to represent, we recognise the appalling cost of temporary accommodation. As the hon. Member for Harrow East (Bob Blackman) said, it costs £5 million every day. The eye-watering average price of a home in my area is nearly £1 million. Given the average prices that the hon. Member for Bromley and Biggin Hill (Peter Fortune) spoke about, we are looking at average private monthly rents of £3,221, so the housing crisis is felt acutely right here in the very centre of London.
We have heard powerful contributions about why this issue matters so much, but I want to reflect on the drivers of this debate: the green belt, greenfield land, the brown belt, the grey belt and brownfield land. Only 6.7% of the green belt is in an area that can be developed for housing. In fact, since 2013, just 0.2% of green-belt land has been brought forward. In London, 99.6% of development takes place on brownfield land. That reflects the London that we all know and love, and is one of the real positives of strategic planning in our great city.
However, we face challenging circumstances in converting planning applications into permissions, and permissions into starts on site. We have heard some really compelling contributions about that. We need to focus on stability in the sector, which is critical for ensuring development and delivery. We must recognise the important role of the £39 billion that the Government put into genuinely affordable homes. We need a stable rent-setting system that will enable councils and housing associations to plan, and a stable economy with interest rates going down so that people can have confidence that they will be able to get on to the housing ladder.
I will now focus my remarks on buy-backs. I welcome the contribution from my very respected hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) on how effective buy-backs can be in solving inner London’s very particular housing crisis. I commend Westminster city council for investing £20 million in buying back 45 former council flats earlier this year. This is something that we can do immediately. We have a short, medium and long-term challenge in recognising London’s and the UK’s housing crisis. Ifirmly believe that this Government, together with the Greater London Authority’s right to buy-back programme, can enable 1,200 homes to be brought into council ownership, and that will make a tangible difference to lives this week, this month and in the years going into the future.
The new programme brought forward by the Greater London Authority, the council homes acquisition programme, is aimed at helping local authorities to buy back 10,000 homes within just the next few years, and that can be supplemented with local authority housing funds. It is a really effective and immediate means of providing people with the home that they deserve and bringing down our temporary accommodation costs. I would be grateful if the Minister updated us on the conversations he is having on that very topic, the immediate temporary accommodation crisis that we face in London, and how together we might move forward by investing in current council homes to tackle that issue.
Fleur Anderson (Putney) (Lab)
It is a pleasure to serve under your chairship for the second time today, Mr Mundell. I welcome this important debate and thank the hon. Member for Old Bexley and Sidcup (Mr French) for securing it. I declare an interest, as my son is studying construction management at London South Bank University—I hope he will be one of the house builders of the future. I also do so because, like all the other hon. Members in this debate, this is one of the biggest issues for my constituency—for so many people who come to my surgery and whom I see every day when I go out and about in the constituency, but also for my own children. I do not know whether they would ever be able to afford to live in my area, and that is no way to build a community. People need to be able to know that their children and grandchildren will be able to live near them, to have work near them and to live in areas that they can afford. At the moment, we do not have that in London; we have a broken housing situation.
Tackling the housing crisis has always been a top priority for the Mayor of London. Despite some of the claims made today, the facts speak for themselves. Sadiq Khan has started more new council homes in London than has been the case at any time since the 1970s. Before the pandemic, he completed more homes than had been the case at any time since the 1930s. That is not luck; it is Labour leadership in action and working hand in hand with Labour boroughs, such as Wandsworth, to deliver for Londoners. Since 2018, 23,000 council homes have been built or are being built with the help of City Hall funding.
We know that the challenges are real. House building is facing a perfect storm: the legacy of Conservative under-investment and, in Wandsworth, Conservative total pandering to developers; sky-high interest rates; soaring construction costs; and the lasting impact of Brexit. Those pressures demand bold, urgent action. That is why I welcome the emergency, time-limited housing package announced by the Government and the mayor, working together, in October. It is a serious intervention, with £322 million of new investment for a City Hall developer investment fund, which will be used to keep affordable housing rates as high as they can be. Like other hon. Members, I hope that we will not just see more dark houses. It is really important that local people have first dibs on all the new houses being built. We need to have those stalled projects unlocked and getting shovels in the ground.
I will highlight two housing developments in my constituency that I think all hon. Members will be very interested in. This is good news. The first is New Acres, which is a £500 million, purpose-built neighbourhood on a brownfield site that has brought 1,034 new rental homes to Wandsworth; it was completed last year. The original plans were that 23% would be affordable. The mayor called the scheme in, and it is now 35% affordable, with 55% of that built in the first phase. It has not been a case of leaving it all to the next phase and then it perhaps not happening. It is there; it is real. It is in my community in Wandsworth. It is one of the UK’s largest build-to-rent schemes and it is—I underline—35% affordable.
The second development is the Alton estate renewal, which just two weeks ago, in the UK’s largest ever regeneration ballot, was overwhelmingly endorsed by residents—82.4% voted in favour. That is the result of the Labour council coming in and saying that the previous Conservative council’s plans just did not work and were being imposed on the community. The Labour council said, “Let’s start again and work with the community.” The community could see that the plans would provide what they wanted for their area. There will be new GP surgeries; dedicated youth facilities, which I am obsessed with; a family hub; improved shops; green spaces, and up to 650 new homes—the developer is the council, so it will be able to ensure that it has the affordable housing and that the whole development is what the community wants—thanks to £100 million in investment from the council and £16 million in Greater London Authority funding, with a focus on family-sized homes.
We need more affordable homes. I am grateful for the Renters’ Rights Act 2025, and for all the work the Minister did on it. I am also grateful for Awaab’s law and its extension to private renters, because the link between housing and mental health issues is very strong. But I agree with other Members that overseas sales need to be reduced. Buy-backs are very important, as is local government funding for repairs. Too many homes stay empty for too long between periods of use. Councils need more money to repair them along the way.
A Labour mayor with a proven track record of house building, backed by a Labour Government with the ambition to deliver, and a Labour council, as we have in Wandsworth, is how we will solve London’s housing crisis. That is how we will build a fairer, stronger city for future generations.
David Mundell (in the Chair)
I call Luke Taylor on behalf of the Liberal Democrats. You have eight minutes.
Luke Taylor (Sutton and Cheam) (LD)
Thank you, Mr Mundell. It is a pleasure to serve under your chairship. I thank the hon. Member for Old Bexley and Sidcup (Mr French) for securing this debate. It is extremely timely, because it is less than a fortnight since I was last in this Chamber debating housing policy—it seems that I am the Liberal Democrats’ housing spokesperson for London. Contrary to what some in the Government seem to think, there is no inherent tension between the three most important tasks facing us: to build safe homes, to build green homes and to build affordable homes. The limitations or structural problems with the market are self-imposed by our lack of ambition and our worrying proclivity to shun innovation.
During the debate two weeks ago, the Housing Secretary and the Mayor of London were announcing the raft of measures that triggered this subsequent debate. The measures were announced not at the Dispatch Box, or even in this Chamber in front of what would have been a captive audience, but to the press, giving us no opportunity to scrutinise them and rendering that Westminster Hall debate moot. I invite the Minister to confirm that no subsequent major changes with such a profound impact on the local authorities that everyone in this room works with on a daily basis and on our constituents will be made outside of this place.
Frankly, those measures are not small fry; they hand developers a get-out while Londoners on waiting lists across our city continue to suffer, and they are a threat to the financial stability and forward-planning ability of local authorities across London. The Liberal Democrats are clear: the plans will not solve the housing crisis in London, but make things worse.
Munira Wilson
My hon. Friend is making an excellent speech. Does he agree that the measures announced by the Mayor of London and the new Housing Secretary actually reward developers and do not incentivise them? Not only will the mayor be funding half of developers’ affordable housing if they meet the new target, but our local authorities will have their community infrastructure levy money slashed. In Richmond, we could lose £21.5 million of CIL money from the Stag brewery site. That comes on top of the Labour Government cutting our core Government funding under their so-called fair funding formula. Our communities are going to be left without the infrastructure they need and deserve alongside new housing developments.
Luke Taylor
I thank my hon. Friend for providing that example of the impact on a specific project, which shows how difficult this will be for our councils.
The announced measures will quietly reduce the requirement for affordable homes from 35% to 20%, forcibly slash the community infrastructure levy money, and barely scratch the surface of the bigger and more profound structural barriers to getting green, affordable and safe housing built. The Government have triggered great uncertainty and more financial instability for local authorities while achieving very little in the shake-up, seemingly because they think that big, decisive action with very little prep work and no consultation is the way to get things done. The Housing Secretary is clearly taking more than just headwear inspiration from a certain world leader—which would make sense if it were not his own zone that he is flooding with a substance that the courtesies of this House do not allow me to name.
In all seriousness, the housing crisis in London deserves more than a knee-jerk reaction. There are 330,000 households stuck on social housing waiting lists—more than the total number of households in our two largest boroughs, Barnet and Croydon, combined. As we have heard, London boroughs are spending £5 million a day on temporary accommodation, although I have heard that figure for about a year, so it must be considerably more by now. According to London Councils, there is a £700 million shortfall in the housing revenue accounts that fund new house building.
The proposed measures will simply make that worse, for two main reasons. First, the Government will facilitate the right kind of house building not by dropping the regulations that developers face, but by amending them and fixing the structural issues within the Building Safety Regulator. Secondly, the measures actively—and inexcusably—disrupt the already stretched financial picture for local authorities. I will take them in turn.
First, granting the right to reduce the level of affordable housing per project fails to recognise that the proliferation of a particular kind of luxury, unaffordable housing in London means that it is unlikely that new building accelerated under the scheme will ease upward pressures on house prices in the capital. Giving the mayor new powers to call in decisions and accelerate them almost on a whim does nothing to address the concerns that local authorities and local residents will have about their ability to object to new housing that will not contribute to solving the crisis. The measures seem to be imposed in an imagined battle against the nimbys, when most in London have lived experience of housing instability—either their own or that of younger family members, co-workers or friends—and, as such, are in favour of the kind of house building that actually addresses the crisis.
Danny Beales
I share the hon. Member’s view of the general public’s opinion on the issue, but as a cabinet member during seven years of planning and redevelopment in Camden, I rarely heard those voices in planning committees. Unfortunately, the voices that are heard are often disproportionately against development and do not represent the people on housing waiting lists. I just challenge the presentation of the public view through the planning system. Is it not true, too, that many local authorities take far too long to determine applications? In my borough—I have just had an email—it has taken six months to draft a section 106 heads of terms document, two years since the planning was approved. Is that not unacceptable?
David Mundell (in the Chair)
Order. Mr Taylor, you have taken two lengthy interventions. I am afraid that they will not be in addition to your time.
Luke Taylor
I thank the hon. Member for his intervention, but I will move on swiftly.
In my experience in Sutton we subscribe to the “yify”—“yes, if”—approach that I have spoken about a number of times. We do not need to water down community buy-in. We might need to make it faster and more efficient, but throwing out the baby with the bathwater will only lead to the wrong housing being built in the wrong places and leave us wondering, in 30 years’ time, why the mistake was not glaringly obvious to people today. That is not a new approach that has reared its head in these measures; the decisions to cut the portion of affordable housing expected from developments in the recent “Homes for Londoners” plan, and to set the annual national social house building target at just 20,000 social homes per year, show that the Government simply do not have a credible plan to provide the kind of housing the country needs.
We need an ambitious whole-of-Government approach to build up to 150,000 social homes each year. It can be done, and the Government need look no further than the Liberal Democrats’ plans. We would give local authorities the power to stop Help to Buy in their area and, as a last resort, to stop the right to buy too, and give them the first right to purchase all public land for social housing. We would also fix the Building Safety Regulator by ending the mismatch between fire safety standards and the Building Safety Act 2022, speeding up the backlog of confusion and incomplete assessments for remediation, while ensuring that the building safety levy covers all the costs so that leaseholders are protected from paying. As well as making it more affordable to insulate existing homes, we would ensure that all new homes are zero carbon and provide proper incentives for critical household infrastructure such as heat pumps. That is how we build more affordable homes—not by tearing up regulations with no regard to the impact, but by smartening regulations and intervening with serious, meaningful incentives to build the right kinds of housing.
Secondly, it will be news to nobody that the financial picture for London councils is dire. The city’s 32 boroughs overspent by £330 million on housing and temporary accommodation budgets last year alone—double the previous year’s figure. As London Councils has demonstrated, the cost of the London homelessness crisis is the greatest threat to the financial stability of London boroughs. Watering down the community infrastructure levy—perhaps the most notable way that councils recoup costs and benefits from house building in the short term—is simply another hammer blow in that regard.
David Mundell (in the Chair)
Order. I think this might be the point at which you need to conclude.
Luke Taylor
Skipping ahead, I invite the Minister to tell us why anyone who cares about solving the housing crisis and protecting local councils in London should vote Labour at the local elections in May, particularly when the only party consistently standing up for those hit hardest by the housing crisis, and for our cash-strapped local councils, is the London Liberal Democrats.
Gareth Bacon (Orpington) (Con)
It is a pleasure to serve under your chairmanship, Mr Mundell, and to take part in this debate about Government support for house building in London. As is the case for all hon. Members here today, this issue is of great importance to my constituents and to me, and I thank my hon. Friend the Member for Old Bexley and Sidcup (Mr French) for securing this important debate. I also thank all hon. Members for their contributions.
London is Europe’s wealthiest city, one of the world’s most desirable destinations and the capital of our great country. I am deeply proud to have represented part of it for the past 28 years, having previously served for 23 years as a local councillor in a London borough—a period that overlapped with my 13 years as a London Assembly member—and been the Member of Parliament for the wonderful people of Orpington since 2019.
What we have seen in recent years in Greater London is a constantly worsening housing shortage, and a mayor seemingly completely incapable of tackling a problem that is spiralling out of control. Sir Sadiq Khan has been mayor for nearly 10 years, and continues to oversee one of the greatest housing failures this country has ever seen. I can remember sitting in the chamber at City Hall in his first year as mayor when he boasted about having negotiated the highest housing funding settlement in the history of the mayoralty. He was awarded £4.82 billion to deliver 116,000 affordable homes between 2016 and 2021, and a further £4 billion to deliver 35,000 affordable homes between 2021 and 2026. That is a total of £8.82 billion to deliver 151,000 homes in a decade between 2016 and 2026. Naturally, he gave no credit at all to the Conservative Government who gave him that money, but let us gloss over that.
Instead, let us focus on Sadiq Khan’s record. To date, 77,622 affordable homes have been completed from the two programmes—barely half of what was envisaged, with only six months to go. Including those programmes and other house building, in his almost decade-long tenure at City Hall, he has averaged 8,240 affordable homes per year. That compares with an average of 11,750 per year between 2008 and 2016 under his predecessor Boris Johnson. That is a 30% decrease under Sadiq Khan, despite what he boasted at the outset was the highest housing funding settlement in history.
The fact is that development has become so costly and over-regulated on Sadiq Khan’s watch that, incredibly, as my hon. Friends the Members for Old Bexley and Sidcup and for Bromley and Biggin Hill (Peter Fortune) pointed out, 80% of housing developments finished in London last year received planning permission under the London plan set out by Boris Johnson before he left office as Mayor of London in 2016, rather than under Sadiq Khan’s London plan.
Gareth Bacon
I am afraid I cannot, because we are under time pressure.
A report recently released by the Centre for Policy Studies described London as
“The City That Doesn’t Build”.
It is impossible not to agree with that when the mayor’s record is put under scrutiny. Under Sadiq Khan, housing starts have collapsed in London, with the number of private homes under construction set to slump to only 15,000 in 2027—a mere a quarter of what should be expected.
Analysis from the Centre for Policy Studies has shown that, over the last financial year, only 4,170 homes have been started in London, amounting to less than 5% of London’s 88,000 home target. In the first half of this year, that has hardly been improved on, with just 2,158 private housing starts, again versus a target of 88,000 per year. Those totals are disastrous. The mayor, the Secretary of State and the Prime Minister should be reversing those figures, not indulging or excusing them.
The picture becomes even worse when we look at affordable housing. Affordable homes had just 347 starts between April and June, which is around 15% of the total starts for 2023-24, and just 9% of the total starts in 2024-25. Prior to the general election last year, the Mayor of London was telling anyone who would listen that he needed £4.9 billion per year for the next 10 years to build affordable homes. The Government elected last July did not accede to his request. Given his appalling record over the past decade, I cannot say I entirely blame them for not trusting his ability to deliver.
At the last spending review in June, as has been mentioned, £11.7 billion was awarded for the next affordable housing programme, which will run from 2026 to 2036. At the last round of Ministry of Housing, Communities and Local Government questions, when I asked the Secretary of State what he was doing to hold the Mayor of London to account for his lamentable record of failure, he alluded to a pending announcement. As the hon. Member for Sutton and Cheam (Luke Taylor) noted, a written ministerial statement was snuck out without fanfare a couple of weeks ago that announced temporary reforms to London house building to try to cover the mayor’s decade of failure.
Some of those proposals are welcome, including the sensible removal of elements that can constrain density, such as dual aspect and units around the core of a building, as well as some of the changes to the insistence on arbitrary and unviable affordable housing targets. However, it is deeply concerning that the Government are proposing to reward the mayor’s decade of failure by giving him more power to intervene on democratically elected local councils and take planning powers away from them.
Most worryingly, that gives the mayor considerable additional powers to concrete over the green belt. There is nothing in the statement about facilitating brownfield development, despite the CPRE report published last month that shows that Greater London has the capacity to deliver in excess of 462,000 new dwellings on brownfield land. The Minister is a very decent man; he is respected across the House, including by me. When we hear him speak in a few moments, I am sure he will give us invaluable insight into how the Government justify these shocking figures. However, to me, they are simply not doing enough to build or to hold the mayor to account for his failures.
The Home Builders Federation has written to the independent Office for Budget Responsibility to say that, without changes to boost affordability for first-time buyers and tax cuts, the Government will miss their national housing target. Another study by the planning and environmental consultancy Lanpro suggested that, at the present of rate of building, the Government would fall 860,000 homes short of their national target—that amounts to missing the target by 57%. Together, the Mayor of London and, more recently, the Government have shown that they are anti-business and anti-growth, with spending and borrowing rising, and with inflation at almost twice the target level, as well as anaemic growth, over-regulation and rising taxation curbing any chance of a housing recovery at every turn.
As I have outlined, this is being felt most in our capital city. I am deeply proud to be a Greater London MP, to have been the London Assembly member for Bexley and Bromley, to have been the Conservative leader at City Hall, to have been a London borough councillor, and to live and work in this great city. That is why I care so much about holding this Government—and specifically their shambolic colleague, the Mayor of London—to account for their abject failures to get house building in London to flourish. Action is sorely needed and desperately wanted. The Government need to do a lot more, and they need to do it now.
David Mundell (in the Chair)
I call the Minister to respond to the debate, and perhaps he can give Mr French a minute at the end to wind up.
The Minister for Housing and Planning (Matthew Pennycook)
It is a pleasure to serve with you in the Chair, Mr Mundell. I start by congratulating the hon. Member for Old Bexley and Sidcup (Mr French) on securing this important debate, and I thank other hon. Members who have spoken for their passionate and—with some notable exceptions—thoughtful contributions. It has been a good debate. I also welcome the shadow Housing Minister, the hon. Member for Orpington (Gareth Bacon), to his place. It is a pleasure to debate opposite him, and I thank him for the kind words he said about me in particular.
It is not in dispute that house building in London is in crisis. The causes of that crisis are multifaceted. London has faced development challenges common to all parts England over recent years, including a significant increase in the price of building materials, a rise in financing costs, and planning capacity and capability pressures. However, it is important to recognise that the capital also faces a number of distinct challenges unique to its housing market that differ in important ways from the rest of the country.
Those challenges include the fact that London is overwhelmingly reliant on flatted developments that have become more challenging to deliver over recent years. It has depended over recent years on demand for international buyers and investors, whose appetite to purchase private market homes has diminished. It also has a higher proportion of landowners, and traders acting on their behalf, who are global investors allocating development funding based on competing returns globally and across asset classes. The combination of those and other factors has resulted in a perfect storm for house building in our capital. That perfect storm has real-world implications for Londoners in housing need.
As you will know, Mr Mundell, as part of our overhaul of the national planning policy framework in December last year, we addressed the fantastical housing target of over 100,000 given to London by the previous Government. That target was based on the punitive application of the now-abolished urban uplift, and it bore no relation whatsoever to addressed housing need in our capital. However, London is still falling far short of the more appropriate target of 87,992 homes per year, which results from the new standard method that we put in place.
We have heard the statistics cited by many hon. Members. Overall home starts in London in 2024-25 totalled just 3,990. In the first quarter of this year, more than a third of London boroughs recorded zero housing starts. I do not mean to single out the hon. Member for Old Bexley and Sidcup—this applies across the board—but in the borough of Bexley, construction was started on just 160 homes, and completions numbered just 210, in the whole of 2024. Those numbers are far too low. In short, London housing delivery is on life support, as is broadly recognised across the Chamber.
In the first 15 months of this Government’s life, we took steps to support the mayor and the GLA in addressing the house building challenges facing the capital. We withdrew the previous Government’s direction of March 2024, which required the GLA to complete an unhelpful, partial review of the London plan, and we have provided the GLA with certainty on grant by making it clear that up to 30% of our new £39 billion social and affordable homes programme will be allocated to London.
However, although those and other vital interventions were beneficial, the Government concluded over the summer that we had no choice but to take further decisive action. That is why, on 23 October, via a written ministerial statement, as is often the case—it was not snuck out; it was published on the Government website for all to see—the Secretary of State and the Mayor of London announced new emergency measures designed to arrest and reverse the collapse in house building in London by lowering development costs and improving scheme viability. The time-limited emergency measures, which I should stress to hon. Members are subject to consultation, are as follows.
First, we will introduce mandatory partial relief from borough-level community infrastructure levy charges for qualifying brownfield residential schemes that start construction before the end of 2028. As hon. Members will be aware, CIL funds strategic infrastructure, such as schools and health facilities, but if no development is taking place, boroughs do not benefit from CIL payments. The more schemes we can get moving, the more CIL funds flow into borough coffers. The reliefs we have announced will cover 50% of the CIL charges for schemes with at least 20% affordable housing, with greater relief for higher proportions of affordable homes, to incentivise house builders to deliver more.
Secondly, we will remove elements of planning guidance that can constrain density. The mayor, supported by Government, will consult on revising guidance in respect of dual aspect requirements, the number of dwellings per core and cycle storage standards. Looking ahead, the next London plan will streamline requirements to reduce duplication and complexity, making it easier to build homes quickly, without compromising quality.
Bob Blackman
Do the new standards apply to new planning applications that are being considered or to ones, already in the pipeline, in which developers have proposed developments with less affordable housing?
Matthew Pennycook
As I have said, there will be consultation on the specifics of many parts of this package, but I will address his particular point about the new time-limited planning route. This route, which will be open for two years, will allow schemes on private land in London to proceed without a viability assessment, provided that they deliver at least 20% affordable housing—importantly, with a minimum of 60% social rent. To incentivise schemes to come forward on this basis, grant funding will be made available for homes above the first 10%, which will remain nil grant.
Crucially, a gainshare mechanism on schemes or phases of schemes not commenced by 31 March 2030 will ensure that, if market conditions improve, communities benefit too. In our view, that is a pragmatic, temporary measure to unlock delivery now, while maintaining our commitment to affordable housing in the long term. It will sit alongside the GLA’s existing fast-track route, which retains its 35% affordable housing threshold.
Matthew Pennycook
I will give way in one second, because I am addressing my right hon. Friend’s point. She got to the nub of the issue, and she said that she recognises that 20% of something is better than 35% of nothing. There is obviously a judgment to be made about what the appropriate package is. We think we have come upon the right package, but it is important to say—again, I do not single her out in saying this—that Islington borough started 20 homes in 2024-25. It is not okay to say that we can wait for these schemes to come forward in the years to come and we can go slow. Such is the crisis that we do need to respond, and the guardrails we have put in place around this package will deliver, get those homes started and make sure that we see more social and affordable homes come forward.
Emily Thornberry
The Minister may know about the Barnsbury estate, which was due to be rebuilt but the building had to be stopped because suddenly we had to build a second staircase. If that had not happened, there would be many more starts in Islington. The biggest site coming is Moorfields, and our concern is that, if only a tiny proportion of that is social housing and the CIL money is cut, it will be a huge opportunity lost to Islington—the best opportunity that we have had for housing local people.
Matthew Pennycook
I recognise my right hon. Friend’s point. I cannot comment on specific applications, but it is important that I emphasise that applicants will be expected in the first instance to seek grant to maintain or increase the level of affordable housing in existing section 106 agreements. Only where that has been fully explored with the GLA, and has been demonstrated not to be possible, can schemes be renegotiated via a deed of variation with the aim of delivering at least the relevant level of affordable housing established in the new planning route, and on the same terms.
We are providing the mayor with new planning powers that expand his ability to intervene directly in applications of potential strategic importance in order to support housing delivery and maximise densities. Those powers are set out the policy statement that we published on 23 October. In response to the concerns raised around those specific powers, I think Londoners would expect, with the scale and severity of the housing crisis we have in our capital, the mayor to do everything he possibly can to ensure homes are not being ruled out without good reason on sites, and to ensure that sites are coming forward with appropriate density.
Matthew Pennycook
I will give way briefly, but it will be the final intervention that I accept.
Munira Wilson
Does the Minister accept that sometimes the mayor’s intervening slows down development? Earlier, I cited the example of Stag brewery in Mortlake. That development of 1,000 units would have started years ago, but thanks to the mayor calling it in, it was slowed down and it has still not been built.
Matthew Pennycook
I am not going to comment on the use of the mayor’s planning powers in specific instances. We think these additional expanded powers are a sensible response to the crisis in house building that London faces.
Finally, we are providing £322 million of funding to establish a City Hall developer investment fund. Building on the success of the mayor’s land fund, which has already delivered 8,000 homes five years ahead of schedule, this new fund will allow the mayor to take a direct, interventionist role in unlocking thousands of homes, driving regeneration and creating thriving communities.
It is also worth noting that alongside the implementation of this package of support, the Government intend to clarify the use of section 73 of the Town and Country Planning Act 1990 so that an application under the section to vary a condition of a planning permission should no longer be used as an alternative means of reconsidering fundamental questions of scheme viability or planning obligations.
In the time available to me I am not going to be able to respond to all the points that have been raised. There have been a number of very good points. I could speak, for example, about what more can be done on TfL land. I think it is worth noting that Places for London is on site, constructing nearly 5,000 homes, 56% of which are affordable. It has already delivered 1,600, but there is definitely more we can do on TfL land around train stations. There is more that the Government are doing on the release of public sector land. I am happy to write to my hon. Friend the Member for Hackney South and Shoreditch (Dame Meg Hillier) about that in particular. I can assure hon. Members that our new social and affordable housing fund will leave a role for acquisitions to be funded.
We know that there is no single simple solution to the development crisis that London is facing. Action to address the acute viability challenges facing residential development in the capital is a necessary intervention, but it is not sufficient. We know that a revival of house building in the capital is dependent on other factors, including increased demand for private for-sale homes, but taken alongside the reforms we are making to the Building Safety Regulator and the significant grant funding we are allocating to London for land, infrastructure and affordable housing, this time-limited package will give house building in London a shot in the arm, and the Government look forward to working with the mayor and the GLA to implement the package and kick-start house building in our capital.
David Mundell (in the Chair)
Mr French, you have 30 seconds to conclude the debate.
Mr French
This has been a healthy cross-party debate, even if we have disagreed on some of the diagnosis. I thank the Minister for his response. I hope he will take away some of the points that have been raised on a constructive basis. I think we all agree that we have to get London building on brownfield again. People have a right to somewhere they can call home. I thank hon. Members for their contributions.
Question put and agreed to.
Resolved,
That this House has considered Government support for housebuilding in London.
Emily Thornberry
On a point of order, Mr Mundell. I should have drawn the House’s attention to my entry in the Register of Members’ Financial Interests. I rent out my late mother’s flat. We bought it for her so that she could release our council house back to the council.