By Henry Courtier – Director of Planning, Clare Preece – Director of Planning, Chris Wheaton – Senior Director of Economics.
The newly published draft London Plan brings some much-needed and honest recognition of the capital’s housing crisis. How the Mayor is proposing to deal with this crisis is in a more realistic and delivery-focused approach.
While a number of welcome factors in the Plan could help unlock sites for residential development, its success will now be judged by its ability to secure the infrastructure funding and partnerships needed to turn capacity into finished homes.
These are top takeaways from the London Plan that developers, landowners, and investors should be aware of.
The London Plan is betting on longer-term pipelines for housing development
The Plan proposes delivery of 558,000 homes by 2037, averaging at 55,800 per year. The Mayor acknowledges this falls short of the Government’s assessed housing need for London, but on the upside, the Plan does acknowledge that significantly greater capacity exists beyond the initial ten-year period.
However, as acknowledged in recent research from the Greater London Authority, an undersupply of housing will ultimately increase housing costs for all households. Failure to grapple with the full assessed housing need for London means a planned under-supply of homes for 10 years or more. This will cause real financial hardship for those on lower incomes.
To get closer to the government’s annual target of 88,000 homes, the Mayor has identified additional capacity through:
- Optimising brownfield site / town centres / Opportunity Areas
- Closer integration between land use and transport
- Small sites / suburban densification (incl. London-wide design code)
- Selective Green Belt release
- Selective industrial land release in accessible locations
- Managing car parking to maximise land available for housing and other needs
Achieving this level of growth, however, will depend on infrastructure investment, policy interventions and delivery mechanisms to tackle the viability constraints currently affecting the London market.
How the London Plan reshapes housing targets – illustrated via maps
The London Plan significantly reallocates housing delivery expectations between boroughs. The Mayor has redistributed these targets to reflect updated assessments of development capacity, infrastructure opportunities and growth potential.
The map in Figure 1 below shows the percentage change of each borough’s annual housing target in the adopted 2021 London Plan versus the new targets proposed in the draft 2026 Plan.
Figure 1: Percentage change in borough housing targets between the 2021 London Plan and Draft London Plan 2026
The picture is far from uniform. Several outer boroughs in London are now expected to deliver significantly more housing than they did before. Conversely, this has led to reduced targets for a number of inner and east boroughs that have historically delivered high volumes of housing.
For example, Ealing’s increase in targets is equivalent to a quarter of the whole overall increase in London’s target – a significant opportunity for the borough, but one it may find challenging given local constraints. On the flipside, Lewisham’s target has decreased by roughly 20%, which may weaken the case for those taking a more bullish approach to building heights and densities. Some boroughs such as Barking — which sees a 50%+ decrease in targets — may also wish to accommodate much greater levels of development given its role in wider economic growth and regeneration.
Figure 2: Borough-level PBSA delivery targets in the Draft London Plan 2026
Crucially, the introduction of student accommodation targets is a huge departure from before. The old pan-London target made it challenging for developers to identify where student opportunities would be best placed and for boroughs to assess delivery against need. Individual borough targets will now create a clearer case for development, and over time, an understanding of where areas are falling short of or exceeding meeting student needs.
Transport will see investment as a core pillar to support housing
We welcome the Plan’s recognition that strategic infrastructure must sit at the heart of any meaningful increase in housing delivery. Indeed, much of London’s future housing capacity is dependent on major transport improvements.
It’s therefore good to see the Plan reference some of the schemes that have the potential to unlock substantial levels of housing growth. These include the West London Orbital, the Bakerloo Line Extension to Hayes, further rail “metroisation,” and enhance connectivity to locations within and around the Green Belt.
Equally, the proposed approach to Green Belt release is a pragmatic step towards ensuring any future development happens in the most sustainable and well-connected locations. This should increase housing delivery while minimising land take and avoiding low-density, car-dependent growth patterns.
With that said, these schemes will need long-term funding commitments if they are to be delivered, in addition to close collaboration between national, regional and local partners.
Green Belt to be selectively targeted for land release
Notably, around 10% of the ten-year housing target is expected to come from Green Belt land. This is a welcome change from former versions of the London Plan and could prove important for maximising housing delivery. But on the flipside, delivering these new communities will require significant infrastructure investment. That is a long-term gambit that will ultimately take many years to come to fruition.
Significant grant funding and public sector intervention needed to support affordable housing
With regards to viability challenges affecting all sites in London at the moment, the draft London Plan acknowledges the need for significantly more funding in grants and public sector intervention to support affordable housing delivery.
While time will tell whether this can be achieved, one thing is certain: the required level of housing growth cannot be achieved by the private sector alone.
Threshold requirements for affordable housing have been reduced
Whilst maintaining a strategic target of 50% affordable housing, the draft London Plan introduces a revised threshold approach dependent upon the site location, size of development and type of land (e.g. Green Belt / public sector).
The new breakdown of thresholds are as follows:
- 20% for outer boroughs
- 25% for more central boroughs
- 35% retained for inner boroughs.
This is a step towards recognising the development viability challenges that exist. But in the current economic climate, many schemes across London are unable to support these levels of affordable housing. For this reason, the Plan is unlikely to be a shift-change that restores delivery through the Fast Track Route, with many schemes still needing to take the Viability Tested Route.
Potential for land conflicts
The draft London Plan acknowledges the need to plan beyond housing, incorporating policies that encourage the development of employment and industrial land, alongside data centres, which are critical to regional and national infrastructure. This, however, could lead to conflict in what is considered the ‘best use’ of land — something the LPAs will have to grapple with.
The London Plan must align with the National Planning Policy Framework (NPPF)
Whilst there is reference to “significant alignment with the draft NPPF”, further refinement will likely to be necessary once NPPF is issued in final form and following this consultation. Jules Pipe, London’s deputy mayor for planning, has previously suggested the final version of the London Plan will be adopted around March 2028.
If you would like to discuss a project you’re working on in the capital, or how the draft London Plan affects you, please get in touch with our experts below.
