London set to loosen planning rules in drive to boost housebuilding

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London’s planning rules for new residential properties are set to be eased under “emergency” provisions being drawn up by the government to arrest a rapid decline in development in the capital city.

Housing secretary Steve Reed is in talks with London mayor Sadiq Khan to tweak the rules on windows and bicycle storage to revive housebuilding in the city, where construction has slumped over the past 18 months.

The changes are likely to loosen the application of design standards for apartment blocks, including on the placing of openable windows and on the amount of bicycle storage provided, according to people familiar with the negotiations.

London’s current housebuilding plan tells the city’s planning authorities to maximise the number of “dual aspect dwellings” that are built, meaning homes that have windows that open on at least two external walls.

Such dwellings have more natural light and better ventilation, but drive up costs for developers because the design of flats in high-rise buildings becomes more complicated.

“The plan makes clear there is a desire for dual aspect except in exceptional circumstances, and many boroughs have applied that guidance meticulously, blocking projects even where they have very high levels of dual aspect,” one official said. “We want to see more flexibility.”

Developers are also currently required to provide a certain amount of bicycle storage, depending on the type of building and whether people live there permanently.

Reed is expected to make an announcement before the end of the month about the “emergency measures” which, although temporary, could last for up to three years, according to those familiar with the discussions.

The Ministry of Housing, Community and Local Government said: “We do not comment on leaks. No decisions have been made. This government is building the biggest increase in social and affordable housing in a generation.”

A spokesperson for the mayor said Khan had met Reed to discuss the challenging conditions facing housebuilding. “Sadiq will always prioritise getting as many affordable homes built as possible — and has shown that by completing more new homes of all tenures in London than any time since the 1930s prior to the pandemic,” he said. 

“The mayor is not seeking to weaken planning standards but is working with the secretary of state to look at how greater flexibility can rapidly increase the rate of building in every borough.”

While the Greater London Authority sets an overall approach to housebuilding, each of the city’s boroughs makes individual planning decisions on development in their area.

The measures come as the number of new housing starts in London slumped to 2,040 in the first half of this year — 55 .9 per cent lower than a year ago, according to the MHCLG. The number falls well short of the 88,000 new homes per year the government says are needed in the capital.

The slump is the result of factors ranging from a lack of affordability to the stifling effect of the Building Safety Regulator, said the Construction Products Association, a trade body. The BSR was set up after the Grenfell fire to more closely monitor the delivery of tall buildings, of which London has a higher preponderance than elsewhere.

Only 15,000 to 20,000 new homes will be under construction at the start of 2027 in London, the housing research firm Molior predicted on Monday.

That compares with 60,000 to 65,000 homes under construction at any given time between 2015 and 2020, according to the firm’s data. 

The Financial Times revealed last month that the GLA is set to cut the proportion of affordable homes developers must provide when trying to fast-track planning, in a bid to spur housebuilding.

The current plan for London is to reduce the affordable housing threshold from 35 per cent for non-public land to about 15-20 per cent.

Likewise, the current 50 per cent target that applies to developments on public land is likely to be cut to roughly 35 per cent, according to people familiar with the situation. 

Talks have also been held about reducing the “community infrastructure levy” that developers must pay to fund local improvements, they added.

One person close to the discussions said: “The general view is that if you can build twice as many homes with half the threshold you still get the same amount of new, affordable homes in the end.”

Officials hope to have a consultation on the new system before the end of the year and to put in place early in 2026.

Khan is also expected to take a more interventionist role in the city’s planning system, with the mayor “calling in” more projects to get them built. 

The GLA is seeking to get the government to approve amendments to the Town and Country Planning order 2008, which controls the mayor’s planning powers, so that the mayor could play a bigger role in approving developments on greenbelt sites.