- Of all the British regions, London has the biggest need for more homes. The median home in London is more than 11.5 times more expensive than the median London salary, and the capital has the lowest vacancy rate of any British region
- The average private renter in London can expect to spend between 40% and 50% of their income on rent. Homes England has estimated that increasing London’s housing stock by 5% would decrease housing costs by 10% and raise economic productivity by 3.1%
- Despite this, only 4,170 homes were started in the capital in 2024-25, less than 5% of the official 88,000 home target
- London has seen a dramatic fall in housebuilding in the past decade. Analysis of data from the consultancy Molior, covering private developments of 20 or more houses, shows that four fifths of homes finished last year received planning permission under Boris Johnson’s London Plans, even if they were signed off during Sir Sadiq Khan’s mayoralty. Just a fifth were built under the plan Khan put in place in 2021
- Even in terms of housing starts rather than completions, 53% of developments that got under way last year got approval under Johnson’s policies rather than Khan’s. Meanwhile, the Mayor’s own affordable housebuilding programme has seen numbers collapse
- A new CPS report, published today, analyses why housebuilding in London has collapsed and how to get the capital building again
- Shadow Secretary of State for Housing, Communities and Local Government James Cleverly said the report shows Khan’s leadership has ‘buried the capital in red tape and stopped homes being built’
Despite the clear need for more houses in London, the capital is building at less than a quarter of the per capita rate of the rest of England, according to new analysis published by the Centre for Policy Studies.
‘The City That Doesn’t Build’ by CPS Head of Housing and Infrastructure Ben Hopkinson shows that in the 2024-25 financial year, only 3,990 homes were started in London. That is less than 5% of its 88,000 home target. There has also been a dramatic and exceptional fall in building in the past decade.
In fact, development has become so difficult that 80% of housing developments finished in London last year received planning permission under the London Plan set out by Boris Johnson when he was Mayor of London in 2016, rather than under Sadiq Khan’s London Plan.
The regulatory environment has made the cost of building so high that even if the land is provided for free, developments in half of London are unviable, according to planning consultancy Molior.
The briefing outlines six main drivers behind the collapse of housebuilding in London:
- Unhelpful economic headwinds, with rising interest rates and construction costs squeezing viability for large, complex developments
- The new Building Safety Regulator (BSR) and second staircase rules. Of the 193 new buildings awaiting approval from the BSR, 92% are awaiting a decision, with the median waiting time sitting at 36 weeks. The last government’s own impact assessment for second staircase regulations that recognised the cost would be 294 times the benefit, yet went ahead regardless. The same impact assessment acknowledged that not a single life is likely to be saved by a second staircase in buildings between 18 and 50m, despite imposing £1.8bn in extra costs. Likewise, the Grenfell inquiry said there was ‘limited’ evidence in their favour
- Excessive and unrealistic affordable housing quotas – mandates of up to 50% subsidised housing, introduced by Sadiq Khan, often make projects financially unviable. On a per capita basis, London has started the fewest affordable homes of any region.
- Failures in the London Plan, which contains over 500 pages of rules, mandatory design requirements, and minimum space standards that drive up costs and restrict supply
- Lack of industrial intensification which sees development in areas such as Park Royal – surrounded by 11 London Underground stations, the Elizabeth Line, and the under-construction HS2 – effectively banned
- Poor use of opportunity areas. The 2021 London Plan identified 47 opportunity areas with potential for at least 2,500 homes, yet delivery in these areas has actually fallen. The planning application for a development in one opportunity area runs to 1,250 pages and it still awaiting approval after more than a year
Shadow Secretary of State for Housing, Communities and Local Government, the Rt Hon Sir James Cleverly said:
‘London needs more homes than anywhere else in the country, yet under Sadiq Khan, housebuilding has fallen off a cliff. Last year, fewer than 4,000 homes were started, less than five per cent of London’s target under Labour’s 1.5 million homes pledge.
‘The new CPS report, The City That Doesn’t Build, exposes the scale of London’s housing collapse. It finds that Boris Johnson’s London Plan delivered more homes last year than Sadiq Khan’s Plan – despite Boris leaving the office of Mayor nine years ago. That’s further proof that Khan’s leadership has buried the capital in red tape and stopped homes being built.’
‘London once built homes for every generation – it can do it again, but not under Labour.’
CPS Head of Housing and Infrastructure and report author Ben Hopkinson said:
‘London’s dramatic decline in new homes starting construction should be a national crisis. From high affordability requirements and excessive mandates around design to the building safety regulator becoming a blocker, barely any homes are being built in the most expensive region in the country.
The Government and the Mayor urgently need to remove the obstacles to building homes in London-before an already bleak situation gets even worse.’
ENDS
NOTES TO EDITORS
- Ben Hopkinson is Head of Housing & Infrastructure at the Centre for Policy Studies and former Head of Research at Britain Remade
- ‘The City That Doesn’t Build’ is available here
- For further information and media requests, please contact Melisa Tourt on 07399 251110 and [email protected]
- The Centre for Policy Studies is one of the oldest and most influential think tanks in Westminster. With a focus on taxation, economic growth, housing, immigration, and energy abundance, its goal is to develop policies that widen enterprise, ownership and opportunity.
Date Added: Friday 17th October 2025
