The draft London Plan: Delivering on Affordable Housing?

On 16 July, the Mayor of London published in draft the new iteration of the “London Plan” for consultation.  The Plan, a self-styled “blueprint for development and growth in London”, addresses a multitude of different issues, and includes specific policies regarding housebuilding and affordable housing which, if adopted, will form the basis of determining planning applications for residential development in London for the next ten years.  

The headline figures are that roughly 550,000 new homes are to be delivered over the ten years following adoption on the Plan – of which around 220,000 are to be social rent homes, and around 120,000 to be for intermediate use. But how has the approach to securing the delivery of affordable housing in the capital changed, and how might this affect what is built and where?

Affordable housing – a new tiered approach to thresholds

The fast-track route is retained for residential planning applications, meaning that if the percentage of affordable housing proposed meets or exceeds that figure, there is no need to carry out a viability appraisal at the planning application stage.  Since its introduction, this has been set at 35% throughout the capital, or 50% on public land. Even the current “emergency measures”, which temporarily reduce this, maintain this blanket approach. 

The draft Plan, though, sweeps this aside, and the minimum affordable housing levels required on a development have now been split by borough, with each borough placed into either band A, B or C. Therefore, depending on location, planning applications are required to deliver the following levels of affordable housing in order to avail themselves of the fast-track planning route:

• Band A = 35%
• Band B = 25%
• Band C = 20%

Broadly speaking, Band A covers inner-city boroughs (including Westminster, City, Camden, Islington, Hackney, Tower Hamlets, Southwark, Lambeth, Kensington & Chelsea, Hammersmith & Fulham), Band B covers mid-zone boroughs (Ealing, Brent, Haringey, Newham, Greenwich, Lewisham), and Band C the outer boroughs (Enfield, Barnet, Havering, Barking & Dagenham, Bromley, Croydon).

But this isn’t the only change of note – as well as using the threshold approach to drive up affordable housing numbers, the GLA are also now using it to incentivise the delivery of certain affordable housing types. For developments in Band A locations, the minimum affordable housing amount can be reduced from 35% to 25% where the affordable homes being delivered are 100% social rent homes (or 100% Key Worker Living Rent tenure for Build to Rent developments).  For Band B locations, the requirement drops from 25% to 20% where 80% of the affordable homes are social rent (or Key Worker Living Rent for a proposed Build to Rent developments).

For developments of between ten and thirty-five homes, there is a blanket requirement for 20% affordable housing to be delivered.

The draft Plan retains the approach of different thresholds for certain categories of land, setting different minimum affordable housing levels to qualify for the fast-track planning route on:

• Public land (40% (or 25% where delivering significant transport infrastructure delivery), down from 50% under the existing plan);
• Industrial land (35%, down from 50% under the existing plan);
• Green Belt land (50% (or 35% where delivering significant transport infrastructure)); and
• Regeneration of existing housing development, where developers must replace all existing affordable homes, with at least 50% of additional homes being of affordable tenure.

Interaction with the ‘London emergency housebuilding measures’

The draft Plan seeks to crystallise, for some at least, the reduced minimum affordable housing requirements from the headline requirement of 35%, building on the base of the current regime in place, introduced by the ‘London emergency housing measures’ in March 2026, which reduce the London-wide threshold from 35% to 20%. Subject to the outcome of the current judicial review of these measures, they are due to remain in place until the new Plan is adopted – expected in early 2028.

The new draft Plan lands somewhere between the previous iteration of the plan and the emergency measures – some downwards movement on the minimum affordable percentages themselves in the majority of boroughs, but not going as far as dropping the minimum to 20% in all instances.

So what does this all mean in practice? 

• Whilst the headline figure of 550,000 new homes to be built over ten years is an increase on the existing plan by circa 30,000 homes, it falls some way short of the official government figures targeting some 850,000 new homes in London over the same period.  Some may query whether the apparent gap between the positions of the Mayor and the government reflects the reality of delivering the stated ambition of 1.5 million homes by the end of this parliament.  This is also in part recognition that the planning regime does not operate isolation - the draft Plan acknowledges the shortfall and indicates that there is scope for greater numbers, but that is dependent upon an uptick in the economy, an increase in grant levels (with the existing thresholds already making assumptions on the level of grant funding available), and investment in transport and other infrastructure which, if it does come forward, is likely to do so after the end of the Plan period.
• The lower minimum affordable housing requirements appears to be a continuation of the logic of the reductions introduced in the emergency measures, i.e. that “20% or 25% of some new affordable homes is better than 35% of none”.  However, this may draw the ire of certain boroughs, not only because they resent the GLA restricting their discretion on the important issues, but because they remain of the view that they should be able to demand higher levels of affordable housing.  The Chartered Institute of Housing had previously called for the Mayor to confirm when the minimum threshold of 35% would be reinstated, but the draft Plan simply includes a statement of intent to do so once “economic conditions allow”.
• The introduction of banding for boroughs for the minimum amount of affordable housing appears to be a pragmatic decision.  The new Plan itself acknowledges the viability challenges of building new homes in some areas and not others (and that London is not one homogenous entity).  The policy could attract issues on a practical level (for example developments near or crossing borough boundaries) but is an attempt to reflect the deviations in viability across the city.  On the other hand, this is still a very blunt instrument, failing to recognise, for example, that viability conditions can vary significantly within certain boroughs. Until economic conditions shift significantly there will remain many sites, especially those facing other challenges such as contamination, where even these lower figures will simply not work.
• The ability for estate regeneration projects to pursue the fast-track planning route is to be welcomed.  However, there is a question mark as to why the minimum affordable housing targets remain so high for such projects (50% of any additional homes).   Many registered providers have been making the case for some time now that estate regeneration needs to be considered in much the same way as delivering new affordable homes per se – and that homes in dire need of replacement will drop out of the affordable home numbers in due course if they are not replaced.
• The introduction of the Key Worker Living Rent tenure as a ‘preferred affordable housing tenure’ is interesting.  Specifically referenced in the draft Plan for minimum affordable housing requirements in Build to Rent developments, this reflects a trend in the Build to Rent sector in how it is best placed to provide rented homes with managed rent levels.  More broadly, it reflects a growing focus within the sector on supporting those who are often caught in the middle – not eligible for affordable rent homes, but increasingly squeezed out of living in the capital due to housing costs.  

Ultimately, the Mayor and the boroughs can only do so much to encourage more housebuilding in the capital.  Whilst there will be plenty of critics arguing for further changes, ultimately the delivery of the much-needed new homes will continue to be driven by market conditions and viability.

The consultation closes on 15 October 2026.