Labour MPs are urging ministers and the London mayor to abandon controversial plans to reduce affordable housing quotas in the capital, warning the move would worsen the housing crisis. The proposal, being drawn up by housing secretary Steve Reed and mayor Sadiq Khan, would allow developers to qualify for fast-track planning approval if they promise to build 20% affordable homes, down from the current minimum of 35%.
Florence Eshalomi, Labour chair of the housing select committee, said: “Solving the housing crisis relies not just on how many new homes we build, but also on their affordability. One of the main drivers of the crisis we are in has been the failure over many decades to build homes that are within reach of local people.” She added: “We must break with the failed status quo and build affordable homes that meet the needs of our communities.”
Stella Creasy, Labour MP for Walthamstow, said: “Walthamstow has been struggling with the impact of development for years... We desperately need genuinely affordable housing and protections for tenants – I hope the mayor will hold firm that these targets matter.” Another Labour MP, speaking anonymously, said: “There must be a way to solve it which does not involve letting developers get away without decent levels of affordable housing.”
The proposal follows a sharp decline in London housebuilding. An analysis by the Centre for Policy Studies showed just 4,170 homes were started in 2024-25, while projections from consultancy Molior suggested only 15,000 homes could be under construction by early 2027. An internal memo revealed Reed and Khan are considering other options, including allowing councils to drop a levy on developers for local infrastructure and increasing subsidies for affordable housing.
Campaigners have warned the plans could exacerbate homelessness. Mairi MacRae of Shelter said: “While developers are allowed to wriggle free of their responsibilities to build their fair share of social homes, communities will continue to suffer.” A government source defended the need for action, saying: “Housebuilding in London is clearly in crisis... We have to look at every lever to tackle the housing emergency we’ve inherited.”
