London has fallen further behind on its housebuilding targets under Sir Sadiq Khan, in a blow to Labour’s national plans.
Almost nine in 10 of the capital’s boroughs missed government targets for new home construction last year, according to newly published figures. The proportion of areas falling short rose from 68pc in 2023.
The number of boroughs falling seriously behind the targets, which measure the number of homes built locally against forecasts for how many are needed, has also risen.
As a result, nearly two-thirds of London councils face losing many of their powers to block new projects. The proportion facing this most serious sanction has risen from just more than a third in 2023.
Lord Bailey of Paddington, the housing spokesman for the City Hall Conservatives, blamed Sir Sadiq for the poor performance, saying onerous requirements for builders had made it far too hard to build in the capital.
He said: “For years, be it through the London Plan, pushing for sky-high affordable housing requirements, or vilifying councils, the Mayor has made it difficult to get housing built and then wonders why starts and completions have fallen off a cliff.”
The downturn threatens to make Labour’s already stretching goal of building 1.5 million homes during this Parliament all but impossible to reach.
Ministers intervened last year to try to reverse the decline in London construction. Sir Sadiq was handed a £300m lifeline in March this year to help the city meet its housebuilding targets.
Early indications show the new policies have not yet had an impact. Construction started on just 2,876 private new-build homes in London during the second quarter of this year.
For London to reach its target of delivering 88,000 homes a year, it needs to start building 22,000 every three months.
Lord Bailey said the Government’s intervention “should be a sobering embarrassment”.
Sir Sadiq has blamed high interest rates, rising material costs, the effect of Brexit and the pandemic for London’s housebuilding slump.
However, industry has blamed the Mayor’s red tape, claiming that the high levels of affordable housing required make projects unaffordable.
Berkeley Group, London’s biggest housebuilder, suggested in April that London had been rendered effectively uninvestable for property developers.
Only four London boroughs – Croydon, Wandsworth, Westminster and Harrow – managed to hit their housing targets in 2025.
London’s performance was worse than the national average. Across the country, more than half of local authorities hit their targets.
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