Housing delivery in London is in a major crisis due to a lack of support for buyers, excessive bureaucracy, unrealistic affordable housing demands and huge delays getting applications approved, according to a report from the Home Builders Federation (HBF).
The capital is expected to deliver 440,000 of the Government’s 1.5 million new homes target by 2030, however only 30,000 homes were completed in London in the year to June 2025, down 12% from the previous year and significantly below the 2019/20 peak.
Neil Jefferson, Chief Executive of the Home Builders Federation, said: “The findings of Mind the Gap should be a major wake-up call for Government and the Mayor of London.
“The capital needs an urgent overhaul of housing policy if it is to support the housing needs of Londoners. London Plan policies combined with additional government taxes on new homes, onerous processes to get higher-rise schemes approved and challenging market conditions have effectively made London a no-go zone for housing investment.
“Intervention is desperately needed to support first-time buyers, with Londoners facing the biggest barriers to home ownership in the country.
“If Government is to stand a chance at making its aspirational 1.5 million homes target a reality, ministers must prioritise action to reverse the alarming decline in housing delivery across the capital.”
Planning permissions have also nosedived to their lowest level since records began in 2006, with just 966 projects approved in the 12 months to June 2025. Adding to the crisis, the overall share of national housing delivery in London has also continued to shrink from 20% a decade ago to just 15% now.
The report urges the Mayor of London to accelerate the pledge to assess green belt land for development review and lower the affordable housing fast-track threshold to 25% to unlock stalled developments. It also calls for a streamlined and more practical London Plan, with local energy policies brought into line with national regulations, and exemptions introduced for smaller schemes to reduce unnecessary burdens.
You can read the full report here: https://www.hbf.co.uk/documents/14913/Mind_the_Gap_Examining_Londons_housing_shortfall.pdf
