{"id":424919,"date":"2025-09-15T00:03:09","date_gmt":"2025-09-15T00:03:09","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/424919\/"},"modified":"2025-09-15T00:03:09","modified_gmt":"2025-09-15T00:03:09","slug":"hbf-urges-government-to-act-warning-london-housing-faces-collapse","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/424919\/","title":{"rendered":"HBF urges government to act, warning London housing faces collapse"},"content":{"rendered":"

\"\"<\/a>Housing delivery in London is facing a deepening crisis, with a new report from the Home Builders Federation (HBF) warning that the capital is on track to miss government housebuilding targets without urgent intervention to improve the viability and pace of development.<\/p>\n

In its latest publication, Mind the Gap, the HBF outlines a series of critical barriers \u2013 ranging from planning delays and excessive policy burdens to affordability constraints and declining buyer demand \u2013 that are \u201cstrangling\u201d attempts to build new homes in London.<\/p>\n

The capital is expected to deliver 440,000 of the government\u2019s 1.5 million homes target by 2030. However, housing completions and planning approvals are both falling year-on-year, putting this contribution at serious risk.<\/p>\n

Stark decline in delivery and permissions<\/strong><\/p>\n

The report reveals that just 30,000 new homes were completed in London in the year to June 2025, based on Energy Performance Certificate data. This represents a 12% drop from the previous year and remains well below pre-pandemic levels.<\/p>\n

Even more concerning is the collapse in planning approvals. Just 966 new residential schemes were approved in the 12 months to June 2025\u2014the lowest number since records began in 2006. The overall share of UK housing delivery in London has fallen from 20% a decade ago to just 15% today.<\/p>\n

Starts on new sites are also falling fast, down 38% year-on-year. With the government\u2019s Standard Method setting a target of 88,000 homes per year for London, output would need to increase by 175%\u2014more than double current levels\u2014to meet that requirement.<\/p>\n

Affordability crisis reaches new extremes<\/strong><\/p>\n

The housing affordability crisis \u2013 now affecting the entire country\u2014is particularly acute in London. With no government support currently available for buyers, and limited access to affordable mortgage lending, homeownership is increasingly out of reach for most.<\/p>\n

According to the HBF, a first-time buyer in London would need to save 50% of their discretionary income for more than 13 years just to afford a deposit. Average deposits now stand at nearly seven times annual income after bills. London\u2019s house price-to-earnings ratio sits at 11, compared to 7.7 nationally, and the average first home costs 17 times the net annual salary of a 22- to 29-year-old.<\/p>\n

Only 15% of first-time buyers purchased in London in 2023\/24 \u2013 down from 25% a decade ago. At the same time, the proportion of households renting privately has more than doubled, while the share of mortgaged households has fallen from 39% to just 25%.<\/p>\n

This weakening demand is eroding developer confidence, undermining investment in new sites, and contributing to the slowdown in delivery.<\/p>\n

Policy and planning bottlenecks<\/strong><\/p>\n

The report highlights several structural challenges that are compounding the delivery crisis. Chief among them are severe planning delays and the complexity of the current London Plan, which contains 88 residential policies in addition to local and national requirements. This has made the process more time-consuming, expensive, and frequently unviable.<\/p>\n

The role of the Building Safety Regulator has also come under scrutiny, particularly given London\u2019s reliance on high-rise developments. As of mid-2025, nearly 10,000 homes were stalled at Gateway Two for more than six months. Additional policy burdens\u2014including mandatory dual staircases, carbon offset payments, and various infrastructure levies\u2014have added unsustainable costs, particularly for apartment-led schemes.<\/p>\n

London\u2019s 35% affordable housing requirement is another major hurdle. With limited availability of Registered Providers to take on Section 106 units, most schemes are forced into protracted viability negotiations, delaying progress further.<\/p>\n

A need for targeted solutions<\/strong><\/p>\n

To address affordability, the HBF argues for the introduction of a tailored equity loan scheme. This, it says, could unlock 17,500 additional homes and help more than 90,000 people into homeownership over the next five years. Currently, only the top 30% of earners can afford to buy in the capital without support.<\/p>\n

Brownfield development\u2014a key part of London\u2019s housing pipeline\u2014is also under threat from rising remediation costs and new policy requirements such as Biodiversity Net Gain and increased Landfill Tax liabilities.<\/p>\n

Calls for action<\/strong><\/p>\n

The HBF is calling on both the Mayor of London and central government to take immediate steps to reverse the downward trend in housing delivery. Among the report\u2019s key recommendations are:<\/p>\n