Sir Keir Starmer is preparing emergency measures to save Sir Sadiq Khan’s London housing plans after a slump in construction.
Ministers are set to push through a package of changes aimed at improving London’s dire housebuilding rate. An announcement could come as soon as Thursday.
Steve Reed, the Housing Secretary, and the Mayor of London have been locked in crisis talks over short-term policy proposals to revive the capital’s plummeting construction levels.
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The changes reportedly include lowering the number of affordable homes that developers are required to build from 35pc to 20pc for projects that can be fast-tracked through the planning process.
Looser design rules are also thought to be part of the measures. Bloomberg, which first reported the plans, said the package could be unveiled as soon as Thursday.
The Mayor has pledged to build 88,000 homes a year in London, underpinning Labour’s wider plan to build 1.5 million homes by the end of parliament.
However, just 40,000 new properties are forecast to be under construction in London by the end of this year, according to recent findings by consultancy Molior, and this figure is expected to plunge in the years to come.
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Builders have complained that the high level of affordable housing required in London developments makes projects unprofitable, discouraging activity. Sir Sadiq has been under pressure from developers to water down his strict affordability targets.
James Barton of Knight Frank said: “Developers will only build what they can sell, so these supply-side reforms must be urgently matched by demand-side stimulus to ensure there is sufficient uptake from buyers and the measures have the desired impact.”
The Government will likely be keen to press ahead with the measures ahead of the Office for Budget Responsibility’s report on economic growth on Nov 26, the same day as the autumn Budget. Rachel Reeves, the Chancellor, has been seeking ways to demonstrate that the economy is on an upward path in order to get more favourable forecasts.
A spokesman for the Mayor of London said: “The Mayor is working with the Housing Secretary on a package of reforms to boost housebuilding in the capital.
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“The changes will aim to unblock stalled sites by cutting red tape 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 Ministry of Housing, Communities and Local Government spokesman said: “No decisions have yet been made.
“We’ve already increased London’s funding for the affordable homes programme and we are working closely with the Mayor on getting the capital building again, including making sure Londoners get the social and affordable homes they desperately need.”