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The Greater London Authority is drawing up plans to lower the proportion of affordable homes developers must provide when trying to fast-track planning, in a bid to spur housebuilding in the capital.
Developers that want to speed up their proposals must generally allocate 35 per cent of a scheme to affordable housing as part of an agreement with their local authority. The GLA has been discussing lowering that threshold, people familiar with the plans said, to quicken the sclerotic pace of housebuilding in the city, which was an important plank of Labour’s election manifesto.
London mayor Sir Sadiq Khan has been under pressure from the governing party to increase housebuilding. Last week he met Steve Reed, who recently took over from Angela Rayner as secretary of state for housing, communities and local government, to discuss the matter, according to a tweet sent by the mayor.
The government wants to deliver 88,000 homes a year in London, part of its pledge to deliver 1.5mn houses this parliament. But only 3,950 new homes were completed in the first half of the year, according to housing research firm Molior.
Developers have complained that the 35 per cent target renders schemes unviable. It is unclear what target is now being considered but the industry has pressed for between 10 and 15 per cent, according to people familiar with the matter.
An ally of Khan said on Saturday: “The GLA continues to work closely with ministers to accelerate housing delivery in the capital.” Reed declined to comment.
The lower threshold would be a “welcome step”, said Steve Turner, executive director of the Home Builders Federation, which represents commercial housebuilders responsible for 80 per cent of new homes in England and Wales. “Clearly any reduction will improve viability on a number of sites.”
But he cautioned that “it needs to be part of a broader suite of moves to get housing moving in the capital”, including solving application delays at the Building Safety Regulator.
Some developers warn that a figure above 15 per cent would still leave them unable to proceed with a scheme and would fail to produce the type of housing growth the government wants.
The number of new homes given planning approval in England in the first three months of this year was the lowest figure for 13 years.
The government is separately expected to detail further plans on Sunday for a dozen new towns in England, three of which will begin construction this parliament.
Each town will consist of at least 10,000 homes and could deliver up to 300,000 homes in coming decades, the government will say.
Sir Keir Starmer, the prime minister, hopes to replicate the successful wave of new towns built in the aftermath of the second world war in places such as Welwyn Garden City, Crawley and Stevenage in England, Cwmbran in Wales and East Kilbride in Scotland. Previous efforts have largely failed to get off the ground.