London reduces affordable housing quota to 20% to spur construction amid crisis

The UK government and London Mayor Sadiq Khan have agreed to reduce the affordable housing quota for new developments in London from 35% to 20% to accelerate housebuilding amid a severe housing crisis. This change aims to incentivize developers by offering fast-track planning approval for projects meeting the lower affordable housing threshold, with 60% of these homes required to be social housing at the cheapest rents. City Hall has also been granted expanded planning powers, including the ability to intervene in rejected developments over 50 homes, and a new £322 million Developer Investment Fund has been created to stimulate construction. The reduction, described as a "time-limited" emergency measure, responds to a "perfect storm" of high construction costs, interest rates, regulatory challenges, and economic conditions that have caused housebuilding in London to slump dramatically. However, the move has sparked criticism from homelessness campaigners and some Labour MPs who fear it undermines efforts to address the housing shortage and reduce homelessness. Officials argue that 20% affordable housing on more developments is better than 35% on fewer projects, as housing starts have collapsed to historic lows, threatening the delivery of new homes for Londoners in need.