28.10.2025
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In response to ongoing challenges facing the housing sector in London, the Ministry of Housing, Communities & Local Government (MHCLG) has released an important policy update. The new measures are designed to support the delivery of housing developments in the capital, with a specific focus on improving the viability of both housing and affordable housing projects. The goal is to help accelerate the delivery of much-needed homes while addressing issues that have previously stalled progress.
Here’s a breakdown of the key aspects of the update and what they mean for developers and the housing sector in London:
One of the most significant changes is the temporary relief from the Community Infrastructure Levy (CIL). This relief is aimed at reducing the financial burden on developers, making it easier to bring forward new housing projects. Key points include:
Applicability: The relief applies to residential floorspace (excluding Purpose-Built Student Accommodation and co-living developments) for schemes that begin construction after the relief is implemented and before December 31, 2028.
Percentage of Relief: Developers can access 50% relief on CIL for schemes delivering at least 20% affordable housing. This can be increased if more than 20% affordable housing is included in the project.
Targeting the Right Projects: The relief will be contingent upon meeting certain criteria. Specifically, it will only apply to projects that would otherwise face delays or might not come forward due to financial viability challenges.
Exclusions: The relief will not apply to the Mayoral Community Infrastructure Levy (MCIL) and is limited to developments on brownfield land. Notably, it will not apply to land on or released from Green Belt or Metropolitan Open Land.
Another key element of the policy update is the removal or relaxation of several elements of planning guidance that have previously constrained density in new developments. This is designed to make it easier for developers to maximize the use of available land in London. These changes include:
Dual Aspect: The Greater London Authority (GLA) proposes to withdraw parts of the Housing Design Standards London Plan Guidance (LPG) that limit the number of dual-aspect dwellings.
Dwellings Per Core: The relevant section of the Housing Design Standards LPG that limited the number of dwellings per core is also set to be withdrawn.
Cycle Storage: In response to the growing need for higher-density developments, the GLA is proposing a reduction in the requirements for cycle parking, offering developers more flexibility.
These changes aim to support higher-density, more sustainable development, aligning with London’s growing demand for housing.
For developers committed to delivering 20% affordable housing, a new time-limited planning route will be available. This route allows developers to secure planning permission without having to conduct a viability assessment, which has often been a barrier to progress in the past. Key aspects of this route include:
Affordable Housing Commitment: Developers must commit to delivering at least 20% affordable housing, half of which will be eligible to receive grant funding.
Gain Share Mechanism: There will be a gain share mechanism to further increase affordable housing delivery, ensuring that the benefits of these projects are maximized for local communities.
This streamlined planning route is expected to encourage more developers to bring forward affordable housing schemes, helping to meet London’s pressing housing needs.
The policy update also includes new powers for the Mayor of London to review and call in planning applications. This includes:
Applications for 50 or More Units: If a borough is inclined to refuse a planning application for a development of 50 units or more, the Mayor will now have the power to review and potentially override the decision.
Green Belt and Metropolitan Open Land: The Mayor will also have the authority to review applications for developments of 1,000 sqm or more on Green Belt or Metropolitan Open Land.
These new powers are aimed at ensuring that key development opportunities are not lost, particularly in areas with significant housing demand.
To further accelerate housing delivery, the Mayor of London will oversee the creation of a new Developer Investment Fund, with an initial allocation of £322 million in grant investment. This fund is designed to unlock stalled projects and encourage the development of new homes in areas where housing delivery has been slower than expected.
The creation of this fund marks a significant step toward improving housing supply and providing much-needed financial support to developers.
It is expected that the Government and GLA will open a consultation period for six weeks starting in November. After the consultation phase, these policies will be implemented through secondary legislation or emergency London Plan Guidance. As such, developers and stakeholders in the housing sector should stay alert to any updates and engage in the consultation process if they have concerns or suggestions.
At DHA Planning, we are closely monitoring these developments and will continue to provide updates as new information becomes available. If you have a site that could be affected by these changes or you’re planning a development in London, our team of expert planners is here to help navigate these new policies and ensure your project complies with the latest guidance.
Please don’t hesitate to get in touch with us to discuss how these updates may impact your development.
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