Housing target could be missed without new funding

Mayor of London Sadiq Khan has said he will not hit his latest affordable housing target for the capital without further support from the government.

He has “a number of asks” of the Labour government to turn the situation around, including "additional support financially, in relation to affordable housing", the mayor told the Local Democracy Reporting Service.

Asked whether he meant more support was still needed to hit his March 2026 target, Mr Khan replied: “Yes.”

The Ministry for Housing, Communities and Local Government said it "will work in partnership with the mayor of London to tackle the housing crisis and deliver the homes that London needs".

A "perfect storm" is affecting London housebuilding, the mayor told the Local Democracy Reporting Service, citing “low growth, high interest rates, the cost of materials to build homes, the consequences of a hard Brexit, the shortage of workers, the lack of funding from the previous government".

“The amount of grant we would be giving to a council or a registered social landlord, to build an affordable home, is now much higher than it used to be,” Mr Khan said.

He continued: “It’s going to be challenging, in relation to the target we’ve got with the government. We’re going to make sure we do everything we can to get these affordable homes built.”

The mayor explained that one of his requests of government was support towards a City Hall developer fund.

"We think £1bn, roughly speaking, can lead to the construction of 16,500 homes – around half of them by 2027," he said, adding he also wanted the government to "give councils the ability to borrow to build".

Mr Khan’s request for extra funding comes weeks after Chancellor Rachel Reeves allocated a further £100m to the affordable housing fund in her Budget.

The increase brings total funding for the programme to £4.1bn, including £4bn of funding handed down by the previous Conservative government.

Under that government the mayor was originally set a goal of starting work on 35,000 affordable homes by the end of the programme, but the target was slashed last year to a range of between 23,900 and 27,200 homes, following a “re-profiling” exercise as costs rose.

So far however, City Hall has started only 2,124 homes, meaning it is currently less than a 10th of the way towards hitting the lower end of the already-reduced target, despite being a third of the way through the time available since receiving funding in July 2023.

Work started on fewer than 200 properties between July and September this year – barely up from the 150 started in the previous three months.

City Hall Conservatives said if the mayor continued at the current rate of progress it would take him more than 30 years beyond the deadline to hit the target.

A spokesman at the Ministry for Housing, Communities and Local Government said: “We know that we must radically boost housebuilding in the capital.

“That is why we will work in partnership with the mayor of London to tackle the housing crisis and deliver the homes that London needs.”

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