Labour MPs are pressing housing secretary Steve Reed and London mayor Sadiq Khan to abandon plans that would reduce affordable housing quotas in the capital. The proposed changes, aimed at boosting homebuilding, would allow developers to qualify for fast-track planning approval with a commitment to build just 20% affordable homes, down from the current minimum of 35%.
Florence Eshalomi, Labour chair of the housing select committee, stated: '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 that London has seen developers prioritise luxury units over affordable housing.
Stella Creasy, Labour MP for Walthamstow, warned that development without adequate affordable housing drives gentrification and increases rents, contributing to high poverty levels. Another unnamed Labour MP said: 'We understand there is a crisis in London housebuilding, but there must be a way to solve it which does not involve letting developers get away without decent levels of affordable housing.'
The urgency for action follows reports showing a sharp decline in housebuilding. Analysis by the Centre for Policy Studies found only 4,170 homes were started in 2024-25, while Molior consultancy projected as few as 15,000 homes under construction by early 2027. An internal memo revealed that Reed and Khan are considering options including reducing affordable housing quotas, allowing councils to drop a levy on developers for infrastructure, and increasing subsidies for affordable housing.
Campaigners have warned the plans could worsen 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 acknowledged the crisis, noting that affordable home starts in London fell to just over 3,000 in 2023-24, and emphasised the need to explore all options to address the housing emergency.
