Mayor convenes Housing Taskforce as he warns of house building 'grinding to halt' under perfect storm of pressures

• New City Hall data shows a 41 per cent year-on-year drop in major planning applications referred to the Mayor, with national forecasts indicating the construction sector faces a recession this year and housebuilding could fall to the lowest level since World War II 
• Last year, the Mayor achieved record-breaking affordable housing delivery, including the highest level of council homebuilding since the 1970s, but warns that Government inaction puts continued delivery at risk
• Mayor writes to Michael Gove, Secretary of State for Housing, calling for additional funding of at least £2.2 billion from Government to boost London’s affordable housing delivery, create jobs and safeguard supply chain
• Sadiq is warning that Government inaction is seriously risking housing building grinding to a halt across the country and putting a stranglehold on progress made in London

 The Mayor of London, Sadiq Khan, has this week reconvened the flagship London Housing Delivery Taskforce, bringing together key figures in the housing sector to discuss the growing crisis across London and the UK.

The Mayor is delivering a record number of affordable homes across the capital, including council homes, but is today warning of Government inaction putting a ‘stranglehold’ on further progress in London.

Nationally, housing experts are forecasting a major drop in housebuilding, driven by high interest rates and building cost inflation, and City Hall’s own data is beginning to see these trends taking hold amongst developers. [1]  

New planning figures reveal that between April and June 2023, there was a 41 per cent decline in the number of homes on major planning applications referred to the Mayor compared to the same period in 2022, and a 53 per cent reduction compared to 2021 [2].

The Government’s own data paints a picture of a sector squeezed to its limits, with national figures showing that the cost of construction materials has gone up 33 per cent since the start of 2021 and 40 per cent since 2020. [3] Across the country, the Home Builders Federation has predicted that Government failure on housebuilding may mean levels of building dropping to the lowest level since World War II. [4]  

In reaction to the growing national housing crisis, Sadiq’s Deputy Mayor for Housing and Residential Development, Tom Copley, and Councillor Darren Rodwell, Executive Member for Housing and Planning at London Councils met with other key figures in the sector this week as part of the reconvened London Housing Delivery Taskforce.

 The Taskforce, which comprises leaders from London councils, unions, construction bodies, developers, community groups, industry organisations and housing associations is asking the Government to ensure that affordable homes continue to be built in London at the pace and scale that is needed.  

Today in a letter to Michael Gove, Secretary of State for Housing, Sadiq is also calling for an additional £2.2bn in affordable housing investment to help kickstart a slowing housing market. The letter includes a stark warning that developers could be forced to down tools if Government does not provide the funding that is required to revive housing delivery across the country after decades of austerity and a lack of commitment from those in power in Westminster. The Taskforce will agree a set of wider asks to Government over the autumn, setting out what is needed by both the private and public sectors to sustain delivery. 

City Hall has stepped up to safeguard the supply of affordable housing and has renegotiated its Affordable Homes Programme 2021-26 with its partners to prevent projects from becoming unviable, despite rising costs. In recent years, City Hall has started work on more council homes than at any time since the 1970s and last year exceeded the Government’s ambitious target to build 116,000 new genuinely affordable homes in the capital.  

 In the short term, the Mayor is calling on Ministers to inject £2.2bn in additional funding to boost London’s affordable housing delivery to levels that were agreed with Government as recently as 2020. This would boost genuinely affordable homebuilding from the 23,900-27,200 homes currently expected to be delivered as part of the 2021-26 Affordable Homes Programme, to 35,000 homes.

In the longer-term, Sadiq continues to call for a funding settlement that meets London’s need, independently assessed by housing experts Savills as requiring £4.9bn a year in affordable housing investment. 

The Mayor of London, Sadiq Khan, said: “Housing has been a top priority of mine since I was elected, and I’ve left no stone unturned in getting London building again. In recent years, more homes have been completed in the capital than at any time since the 1930s, genuinely affordable homebuilding has hit the highest level since records began, and we’ve started work on more new council homes than at any time since the 1970s. 

“But with spiralling costs, the housing sector is increasingly facing a perfect storm of pressures. The national housing crisis is not just piling pain on households, but it’s threatening future housebuilding too. The Government cannot afford to sit around any longer. We need urgent investment from the Government to keep our city and our country building.

 “If not, Government inaction is seriously risking housebuilding grinding to a halt across the country and putting a stranglehold on the progress we’ve made in London.”

The Deputy Mayor for Housing and Residential Development, Tom Copley, said: “London’s housing sector is facing a crisis the like of which we’ve never seen before. Alongside London Councils we’ve reconvened the London Housing Delivery Taskforce, which brings together leaders from across London’s housing sector, to identify what more needs to be done to protect the industry from the turbulent economic conditions it currently faces and get London’s housing delivery back on track.  

“Ministers need to wake up and realise that every light on the dashboard is flashing red. We need an immediate injection of £2.2 billion to steady the ship and get us back on course to deliver 35,000 new genuinely affordable homes. The taskforce will identify further measures needed to prevent a total collapse of house building in London. Now is the time for bold action from the Government, not more platitudes and half measures.” 

Angela Wood, Chair of the G15 Development Directors Group said: “The delivery of new affordable homes for Londoners is on a cliff edge. The G15 has skilled teams that are ready and able to deliver the new homes that are desperately needed. But rising costs, high interest rates and housing associations’ need to prioritise investment in existing homes means that the supply of new social homes is going to fall. With one in 50 Londoners effectively homeless and in temporary accommodation this is a growing housing emergency.

More public investment for social housing to complement our own, as part of a package of support, would help to reverse this. It would help us fund more social rented homes and begin to tackle the crisis - lifting people out of poverty, boosting health and wellbeing, creating jobs and driving sustainable economic growth across the country. We welcome all measures which support these goals and are ready to work with the mayor, London councils, government and partners to deliver.”

Cllr Nesil Caliskan, Leader of Enfield Council, said: “Boroughs like Enfield have invested to bring forward regeneration schemes that will increase the supply of homes and improve the quality of existing housing, both directly and in partnership with developers and housing associations.  

“The good progress made is now at severe risk due to the serious implications of market conditions and this requires the additional investment being called on by the Mayor. The housing crisis for Londoners has risen to a new level with families and a staggering 1 in 23 children living in hotel accommodation for prolonged periods of time. Without this investment the situation is set to get worse and Councils are powerless to respond.” 

ENDS