Excessive bureaucracy, building safety hold-ups and unrealistic targets sees completions head into reverse
The government’s housebuilding targets will be unachievable unless it intervenes to end “nosediving” investment in the capital, the Home Builders Federation has warned.
In a report today, the HBF points to housing delivery indicators heading “in the wrong direction” and said that with the capital expected to deliver 440,000 of Keir Starmer’s targeted 1.5m homes, the government’s housing targets are at risk unless the situation improves.
A spokesperson for the HBF said: “A lack of support for buyers; excessive bureaucracy; unrealistic affordable housing demands and huge delays getting applications approved, not least with the Building Safety Regulator, are all strangling attempts to deliver desperately needed new homes.”
The HBFs ‘Mind the Gap’ report points out only 30,000 homes were completed in London in the year to June 2025, as measured by the number of new properties issued with Energy Performance Certificates. This is down 12% from the previous year and significantly below the 2019/20 peak when the figure topped 40,000.
The report cites official figures showing planning permissions have dropped to their lowest level since records began in 2006, with just 966 projects approved in the 12 months to June 2025.
The overall share of national housing delivery in London has also reduced from 20% a decade ago to just 15% today. The report cited Greater London Authority figures showing residential starts fell 38% between 2022/23 and 2023/24. A total of 996 new projects were approved in the year to June 2025, the lowest figure since records began in 2006.
The HBF said: “With the government’s standard method setting a requirement for London to deliver 88,000 homes a year, output would need to more than double, increasing by 175%, to meet that goal, casting serious doubt on the city’s ability to meet future needs and make the required contribution to government’s 1.5 million homes target.”
The HBF said the Building Safety Regulator is having a disproportionate impact in London with almost 10,000 homes stuck in the Building Safety Act’s ‘gateway 2’ approval process for more than six months.
It added: “When combined with other policy costs, such as dual staircase requirements, carbon offset charges, and per-square-metre levies under the Building Safety and Mayoral Construction Infrastructure Levy, the financial burden on developers, particularly those building apartment schemes, has become unsustainable.”
It said London’s 35% affordable housing requirement is another major constraint. It said: “Few schemes can meet the threshold, as the lack of registered providers willing to take on section 106 units compounds the problem.”
It said a lack of dedicated support to address first-time buyer affordability constraints has further weakened demand, power grid capacity issues are slowing schemes and brownfield development is under threat due to high remediation costs and new policy burdens such as Biodiversity Net Gain and Landfill Tax changes.
The HBF report makes several recommendations to ministers. It calls for ministers to look at resolving the section 106 issues through more flexible ‘cascade’ mechanisms and allowing Homes England grant funding to be used for section 106 schemes. It calls for a new targeted home ownership scheme to help first-time buyers build new energy-efficient homes and also said the BSR’s performance should be monitored with extra resources or streamlining implemented if necessary. It said the Building Safety Levy should be suspended.
The HBF also outlined several asks of the Mayor of London which include completing a review of green belt land as quickly as possible and lowering affordable housing requirements on sites.
In a separate report today funder Octane Capital said the number of homes delivered through change of use has fallen 22% in the past five years compared to the previous five-year period.
Housing Today and G15’s State of the Capital report
Providing new social tenancies for the 323,800 households on London’s waiting lists would inject at least an additional £7.7bn a year into London and the UK’s economy.
However, while social housing providers and ministers are both aware of the need for more affordable housing, both housing associations and the government have balance sheets constraints.
This inaugural State of the Capital report, produced by Housing Today in partnership with G15, looks at several ideas that could be adopted to help the sector build much-needed affordable housing in London during these difficult times.
The report is written by Carl Brown of Housing Today, in collaboration with the G15.
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