London councils won’t be able to sue their way to more homes being built
Last week I asked the chief executive of one of the country’s largest housing developers to sum up the state of housebuilding in London, and the answer was “dire.” If I’d allowed two words I suspect one of them would have been unprintable.
The situation is so disastrous that Sadiq Khan was forced to lower the affordable housing quota for new developments from 35 per cent to 20 per cent in a bid to get some spades in the ground.
Housebuilders in the capital have faced a storm of challenges in recent years including severe planning delays, infrastructure and community levies, new safety rules (such as second staircases in buildings over 18 meters) along with high labour costs, rising material costs and high interest rates. The result? Just over 5,500 new private residential homes were started in 2025 according to research by consultancy Molior. That’s down 84 per cent on 2015, despite rising demand. Reducing the required percentage of affordable homes in new developments was a necessary step to correct an absurd distortion. After all, what matters is the total number of homes built.
But this week three London councils have launched legal action against the Mayor of London in a bid to force the return of a higher affordable home requirement. Hackney, Lewisham and Tower Hamlets are leading the charge, though they should perhaps get their own houses in order, first. Hackney and Lewisham have both been severely reprimanded by the Housing Ombudsman for multiple failures while Tower Hamlets has also faced a litany of criticism. These boroughs do not represent a shining example of best practice.
There is no way that successfully challenging the Mayor’s emergency measures to speed up new developments would result in more homes being built. What’s needed is an overhaul of the layer upon layer of tax and red tap imposed on a sector that increasingly views building in London as unviable.
Yesterday, the boss of Berkeley Group reiterated his calls for a reduction in the taxes imposed on the sector and the removal of regulations that hold back construction. Rob Perrins put it bluntly: “Every part of the system needs to work to reduce the time taken to get buildings into development and allow homebuilders to make a return commensurate with the risk that can attract the necessary investment capital.”
Going to court to reimpose targets that reduce the viability of development is the very opposite of what’s required.