Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 35
35
Acknowledged
Continue working with GLA to accelerate London housing delivery, implementing a clawback mechanism for profits.
Recommendation
The Ministry must continue its work with the Greater London Authority to deliver an acceleration package, so that London boroughs are delivering housing in line with their local housing need targets. In response to this Report, the Ministry must provide its assessment of how changes to London’s affordable housing target may deliver more affordable housing units, by increasing the number of new homes built overall. Any reduction to London’s affordable housing target must be accompanied by a clawback mechanism to ensure developers return a portion of their profits to the local authority, ringfenced for affordable housing delivery, if a development surpasses an agreed benchmark profit. If London’s affordable housing target is reduced and the number of affordable housing units delivered declines, the Ministry and the Greater London Authority must commit to reinstating the 35% target. (Recommendation, Paragraph 149) 69
Government Response Summary
The government acknowledges the recommendation and points to a new package of support for housebuilding in London that includes developers to access a new, time-limited planning route to incentivise build out to address this.
Government Response
Acknowledged
HM Government
Acknowledged
76. While viability pressures are impacting residential development in many parts of the country, we know they are particularly acute in London. Those pressures were already resulting in proportions of affordable housing being reduced on schemes following viability assessment. According to GLA monitoring data, the average affordable housing level of referable applications that have been approved through their viability tested route was 20 per cent between 2022–2024. 77. To address this, the Secretary of State and the Mayor of London announced a new package of support for housebuilding in London that included developers to access a new, time-limited planning route to incentivise build out. This will sit alongside the existing Fast Track and Viability Tested routes and will enable developers to secure planning permission without a viability assessment on private land where they commit to 20 per cent affordable housing (60% of which must be Social Rent), of which half will be eligible to receive grant funding, with a gain-share mechanism to increase affordable delivery on sites that continue into the next decade where market conditions improve. Details of the package were set out in a policy statement published on 23 October 2025, available here: Support for housebuilding in London - GOV.UK. 78. The new threshold is supported by flexibility: the review mechanism allows for uplift where viability improves. All funds recovered through the review mechanism will be ringfenced for affordable housing delivery. 79. Our engagement with the sector indicates that these measures will encourage schemes to come forward, and existing schemes to progress, in the near-term, and will thereby support a rapid recovery in housing delivery. It is designed to increase overall housing supply, recognizing that in many boroughs, no new affordable homes are being built at all. In 2023– 24, affordable housing starts in London fell to just 3,156 – down from over 26,000 the year before. 80. The consultations for the measures in the package opened in November 2025 and closed on 22 January. You can find the MHCLG led consultation on CIL and Mayoral planning powers here: Support for housebuilding in London - GOV.UK and the GLA led consultation on the new time limited planning route and density policies here: Support for Housebuilding LPG | London City Hall 81. The Government is committed to working in partnership with the Mayor of London boroughs, and wider partners to significantly increase housing delivery in London and meet these ambitions. 21