Latest figures suggest builders began work on just 3,248 new private-sector homes in the first three months of 2025, reports Kumail Jaffer, Local Democracy Reporter

Sir Sadiq Khan (right) with deputy mayor Tom Copley (left) (credit GLA)

Mayor of London Sir Sadiq Khan has insisted that building council homes is still of the utmost importance after it emerged that he is preparing to slash affordable housing requirements for developers.

Khan and Housing Secretary Steve Reed are currently weighing up proposals to cut the required affordable homes ratio from 35% to 20% to stimulate housebuilding in the capital.

London’s construction stagnation has been well-documented in recent months, with figures published last week suggesting builders began work on just 3,248 new private-sector homes in the first three months of 2025.

The new affordable housing requirements, set to be announced in the coming weeks, have been confirmed to the Local Democracy Reporting Service (LDRS) by well-placed City Hall sources.

When asked about the measures on Friday (17th), Khan told the LDRS that he understands the “importance” of social housing but that housebuilding in London needed a boost.

“I’m somebody who knows the difference council housing can make – I was born and raised on a council estate,” he said on a visit to St Mary’s RC Primary School in Battersea.

“I’m a mayor that has built more council houses than any time since the 1970s, so I understand the importance of council housing. We’re looking at what we can do to try and kickstart housebuilding in London because it’s, like the rest of the country, almost [ground] to a halt.

“So we’re working with the government about what we can do to try and stimulate the building of more homes and that includes council homes and homes that are generally affordable.”

Both the mayor and his deputy responsible for housing, Tom Copley, have blamed a “perfect storm” of factors for London’s failure to keep up with the new government’s demands, including high material costs and interest rates, as well as delays caused by the Building Safety Regulator (BSR).

Ministers have set a target for 1.5 million new homes to be built by the end of this parliament in 2029. This includes 88,000 every year in London for the next decade.

But with just 347 affordable homes started across London between April and June, both ministers and City Hall have been engaged in crunch talks about planning reform in the capital.

On Monday (20th) the mayor was told that the proposals would serve developers, rather than those who need affordable housing.

Green Party London Assembly Member Zoë Garbett said: “For too long we’ve entrusted our basic right to a home to a cartel of property developers who’ve made billions turning our city into a playground for the rich, while 90,000 children in London are forced to live in temporary accommodation.

“Lowering these targets will not solve our housing emergency. It will only serve to protect the profits of the same developers who got us into this mess, while driving up prices and slashing the delivery of desperately needed social homes.

“The mayor talks a big game about wanting to build more affordable housing, but if he truly means it, he must start loudly demanding more government funding to build the next generation of social homes. Londoners deserve a mayor who fights for them – not one who takes orders from billionaire developers.”

Last month research from London Councils showed that boroughs across the capital are collectively spending £5.5million a day on homelessness, with the majority of that on providing temporary accommodation.

Hina Bokhari, the Liberal Democrat group leader on the London Assembly, told the LDRS: “Record homelessness, families trapped in temporary accommodation, people losing hope on endless waiting lists – and the mayor’s solution is to let developers off the hook and slash affordable housing targets?

“This won’t solve London’s housing emergency, it will only make it worse.”

However, the Conservative group backed the move and accused Khan of being too slow to come round to it.

Assembly member Lord Bailey told the LDRS: “The affordable housing target has long been a barrier to viable development in London, in the midst of an acute housing crisis. Londoners are struggling with rent and mortgages, and I hope for their sake desperately that the government tackles this problem, but they are failing when it comes to policy like this.

“Councils are crippled by temporary accommodation costs and land lies undeveloped – any barrier to housing must be reviewed.

“The mayor has resisted change on this issue and been slow to respond, and this has stopped housing of any type and tenure being built – or at an extremely slow rate. It’s a deep shame that Khan has taken so long to address this matter, and it is a failure.”

Last month the Home Builders Federation (HBF), a trade body representing the majority of private sector developers, recommended the affordable homes ratio drop to 25%.

A spokesperson for the mayor said: “The mayor and secretary of state [Reed] met recently to discuss the challenging conditions facing housebuilding in London. The disastrous legacy and underfunding from the last government led to record construction costs, high interest rates, and lengthy delays from the Building Safety Regulator, which created a perfect storm leaving the capital facing the worst conditions for housebuilding in decades.

“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, tens of thousands of genuinely affordable homes across the capital, and more new council homes started than any time since the 1970s.

“The mayor is working with the housing secretary on a package of reforms to boost housebuilding in the capital. Expected to be launched in the coming weeks, the changes will aim to unblock stalled sites and give the mayor stronger levers to approve homes and bring thousands of homes forward more quickly as we continue to build a better, fairer, more prosperous London for all.”

A Whitehall source told the LDRS that “no decisions have been made” yet, but added: “Housebuilding in London is clearly in crisis. Since 2020 the number of homes under construction for private sale or rent at any one time has fallen by a third, to around 40,000 today – and just over 3,000 affordable homes were started across the city in 2023/24.

“We’ve already increased London’s funding for the affordable homes programme. But with so many Londoners stuck in temporary accommodation or on housing waiting lists that take years, we have to look at every lever to tackle the housing emergency we’ve inherited. That’s why we are working with the mayor on getting the capital building again, including the social and affordable homes Londoners desperately need.”

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