London Housing Plans Face Developer Criticism Amid Crisis

Sir Sadiq Khan’s emergency proposals to tackle London’s persistent housing crisis remain under significant scrutiny as major developers express scepticism over their likely effectiveness. The Mayor has unveiled a new plan that aims to deliver 88,000 homes annually in the capital, including a £322 million funding boost and a reduction in the affordable housing requirement for developments, which now stands at 20 percent, down from the previous 35 percent.

Jennie Daly, Chief Executive of Taylor Wimpey, one of the UK’s leading housebuilders, has voiced her concerns regarding the Mayor’s approach. Daly asserts that the new measures are only incremental and do not sufficiently address the magnitude of the housing challenge facing London. She argues that persistent issues remain on both the supply and demand sides of the market, which undermine the potential success of the initiative.

Developers have repeatedly cited the high proportion of mandatory affordable homes as detrimental to project viability, claiming that the financial burdens imposed by policy and regulation are rendering schemes unprofitable. Despite the reduced requirement, Daly stresses that construction costs in London still outstrip sales prices and that ongoing weakness in the capital’s property market further dampens prospects for large scale development.

While acknowledging that the recent adjustments could make marginal sites more viable, Daly maintains that the measures overlook critical cost pressures and do not incentivise sufficient risk-taking among developers. She emphasises that London must offer a more attractive environment for investment to reinvigorate the sector.

The government, in conjunction with the Mayor’s office, has agreed on this time-limited package to address both economic and regulatory obstacles inhibiting new housing projects. Officials from the Mayor’s office note that their actions are designed to accelerate the delivery of affordable homes across London and remove key barriers to construction.

Uncertainty around potential tax reforms, including a possible mansion tax to be outlined in the forthcoming Budget, has cast a shadow over the industry. Daly observed that the speculation is contributing to a slowdown in housing orders, with Taylor Wimpey’s order book now 7 percent lower than last year, potentially affecting output into 2026. The sector is calling for greater clarity and a more robust strategy to secure the future of housebuilding in the capital.