Scrap newt and bat rules to ease London housing crisis, ministers told

London has a habit of absorbing contradictions and carrying on regardless. It sells itself as a world city where talent is meant to be welcomed, capital is meant to find a home, and the young are meant to be able to arrive with ambition rather than inheritance. Yet it is increasingly a place where the basic mechanics of building, renting and buying have begun to fail at scale. The Centre for Policy Studies, in a report published this week, has chosen to frame that failure in stark terms: a capital facing its worst housebuilding crisis since the Second World War, and a government urged to stop, in effect, letting newts and bats dictate the tempo of development.

The numbers, even before one descends into the arguments about planning, land and regulation, are an indictment. Only 4,170 homes began construction last year, a fraction of the 88,000 that ministers say London must deliver annually if targets are to be met. There are caveats, of course. “Starts” are a narrow measure. Supply is lumpy, finance has become more expensive, and construction capacity is not infinite. But a gap of this magnitude does not read like a cyclical wobble. It reads like a system that has ceased to function as designed, and where every additional requirement, however well intentioned, risks becoming another weight on a structure already buckling.

The CPS’s central demand is straightforward: remove biodiversity net gain rules from brownfield development in London, and establish a clearer presumption in favour of building on previously used land. Biodiversity net gain regulations require developers to increase habitats on a site by 10 per cent. The principle sounds uncontroversial, even admirable, in a country that has watched nature retreat under decades of development and intensive agriculture. Yet the think tank argues that the policy, applied with equal force to a disused car park in the capital and an untouched field at the edge of a village, collapses crucial distinctions. It treats marginal ecological gains in the densest parts of London as if they were equivalent to the losses incurred when green fields are turned to housing.

This is the crux of an increasingly familiar British policy problem: the state creates a general rule to correct a real harm, then applies it so mechanically that the cure begins to compete with another, equally real, public good. London’s housing shortage is not a theoretical inconvenience. It is a living pressure that reshapes families, labour markets and public services. It decides who can take a job in the capital, who can stay near ageing parents, who can afford a spare room for a child, and who can keep a key worker within reach of a shift.

Supporters of biodiversity requirements would respond that the environment is not a luxury add-on to be considered when the hard work is done. It is part of the hard work. They would argue that cities need nature too, that urban biodiversity has health and climate benefits, and that decades of “build now, mitigate later” politics have left Britain with depleted habitats and fragile ecosystems. But the CPS is not making the crude claim that nature is irrelevant. It is making a more politically potent argument: that the marginal benefit of forcing expensive surveys and monitoring on brownfield schemes in London is outweighed by the social and economic value of putting more homes where demand is highest.

In practice, the think tank says, the rules impose costs that can be decisive. Environmental surveys, monitoring programmes and specialist consultants do not just add paperwork. They add risk and delay, and in development risk and time are costs as surely as bricks and labour. When the land itself is expensive, the funding is more costly than it was a few years ago, and sales prices are no longer rising in a reliable upward march, the viability of a scheme can be tipped by what appears, in isolation, to be a modest obligation.

Developers have been making a version of this complaint for years, but there is a difference between an industry’s habitual grumbling and a retreat by one of the sector’s most prominent players. Berkeley Group, which built more than 4,000 homes in and around London last year, announced in April that it was scaling back in response to an “unprecedented increase in cost and regulation”. Berkeley’s warnings carry weight not because it is always right, but because it has been one of the firms most invested in the London model: large sites, complex regeneration, high levels of planning negotiation, and a reliance on the capital’s long-term desirability. If even a housebuilder built for London is losing faith in London’s ability to build, that is a signal politicians ignore at their peril.

Yet it would be too easy, and too convenient, to reduce the housing crisis to a single regulation, or even to “red tape” as an all-purpose villain. London’s shortage has deeper roots: a chronic mismatch between population growth and new supply, a planning system that gives enormous leverage to those who prefer the status quo, and a political economy in which the owners of scarce housing are understandably resistant to changes that threaten its value. Add to that the sheer fragmentation of authority. Borough councils, City Hall, Whitehall departments, statutory consultees, and a thicket of rules and guidance can each slow or reshape a project. No one actor appears able to guarantee delivery, yet each can prevent it.

That is why the CPS report is as much about power as it is about wildlife. Its suggested remedies include not only exemption from biodiversity net gain on London brownfield sites, but also structural devices designed to bypass municipal constraint. The report calls for new urban development corporations that could publish local plans and approve planning applications, insulated from the financial pressures facing local authorities. It points to areas such as the Old Kent Road and the corridor between the City and Canary Wharf, where land values are high, transport links are strong, and regeneration has long been promised in speeches and brochures. Such corporations echo older British traditions: the postwar new towns, the docklands development corporation, and the periodic belief that if only one could cut through local politics, Britain would build.

The difficulty is that cutting through local politics does not abolish politics. It simply moves it. Estates and industrial sites are not empty chessboards. They are places with residents, employers, memories and legal rights. They are also the locations of London’s perennial collision between a city’s need to evolve and its fear of being remade for someone else. When planning is accelerated, the question is always accelerated for whom. The CPS wants speed and scale. Those affected want guarantees about quality, affordability, and the ability to remain in place.

One of the report’s most eye-catching claims is that London could create an additional 500,000 homes by doubling density on older, low-rise council estates. That figure is, at minimum, an invitation to rethink the assumptions that have made many estates politically untouchable. London is dotted with public housing built at a time when land felt less scarce, building height carried stronger stigma, and modernist planning still promised light and space as a substitute for centrality. It is also dotted with regeneration projects that have left residents suspicious of grand plans. Density, even when it makes economic sense, can become socially combustible when it is experienced as displacement