London Plan’s 550,000 home target does not go far enough in meeting capital’s needs

RE:UK's consultation response, submitted today, welcomes efforts to streamline the draft London Plan and recognises its importance in outlining how the capital can deliver the right mix of homes, employment space and infrastructure over the next 20-25 years. Many areas of the Plan should be commended, including its streamlined approach, stronger recognition of industrial and logistics land needs and dedicated data centres policy.

However, the Plan must go further in outlining a compelling and visionary strategy for London’s future growth. RE:UK calls on the GLA to raise its housebuilding ambitions significantly closer to the Government's assessed need, extend emergency viability measures until the market demonstrably recovers, and conduct a rigorous cumulative test of the combined policy costs bearing on development viability. 

Beyond housing, RE:UK urges the Plan to draw a clearer and more explicit link between homes, jobs and infrastructure, and to align its strategic framework more coherently with the more positive pro-housing and growth national planning policy agenda, ensuring London leads by example as one of the first in a new generation of Spatial Development Strategies.

Sam Bensted, Assistant Director at Real Estate:UK, said:
“The Draft London Plan contains many encouraging signals. Its streamlined approach, stronger recognition of industrial and logistics land needs and dedicated data centres policy are all positive steps aimed at both keeping London’s economy supplied and boosting capacity and innovation. However, when it comes to housing, the Plan does not go far enough. London faces acute housing, infrastructure and economic pressures, and needs a visionary strategy that confronts its problems, rather than plans around them. 

“While London’s development challenges have no doubt been reflected in the realities of the outlined housing targets, the new London Plan will be one of the first in a new generation of SDSs. As such, the GLA must be more ambitious in outlining its blueprint for local delivery, setting the capital on a truly pioneering pathway to growth and – equally importantly – setting the tone and precedent for other Spatial Development Strategies to come across the country.” 

Housing
While recognising the difficult conditions in which the GLA has set its housebuilding targets (aiming for just over 550,000 over the next ten years), RE:UK believes this proposed figure is materially below identified need, which - according to the Government - lies closer to 850,000 new homes required over the same period. Planning for substantially less housing than assessed need is not only concerning in its own right, but also sets an unhelpful precedent for other Spatial Development Strategies (“SDSs”), particularly if constrained capacity is accepted without a clear strategy for increasing supply. 

In this light, RE:UK calls on local government to outline a clearer and more ambitious pathway for meeting London’s housing need. The final Plan must provide more solutions for how London can accommodate a higher target to unlock additional home delivery over the coming decade. This last point is particularly relevant given the decline in housing starts and the limited pipeline of new schemes, with current completions often reflecting schemes started years ago, obscuring the full effect of the slowdown.

Ending of emergency measures
Greater clarity is needed on how the Plan’s implementation coincides with the end of the GLA’s emergency measures for housebuilding in 2028 and whether there is a case for embedding greater flexibility within the plan around affordable targets and tenure mix. It is concerning that measures intended to support viability will be removed at a time when housing starts remain under significant pressure. They should continue to apply until a notable uptick in starts is seen.  

Viability and the cumulative cost of policies
The London Plan rightly calls for more affordable, sustainable and accessible housing. However, as we’ve seen from recent decisions by some developers to press pause on delivery in parts of the UK, affordable housing thresholds, environmental standards and infrastructure contributions all affect viability. RE:UK encourages the GLA to test affordable housing, sustainability and energy standards, infrastructure contributions and other obligations cumulatively against current market conditions and a range of development models, as well as clarify how these priorities will be balanced where requirements cannot be met in full. Further detail on how the viability evidence captures these combined costs would also give greater confidence in the Plan’s delivery.

Connecting homes, jobs and infrastructure
There is an opportunity to make the relationship between housing and economic growth more explicit, reflecting how businesses need both access to suitable space and to a workforce which in turn needs homes across a range of tenures. The Plan could give clearer recognition to offices and other employment development alongside industrial and logistics uses. Opportunities also exist to build significantly more homes around well-connected stations, on suitable public land and through estate regeneration. Yet these need careful assessment alongside the transport, utilities, funding and local decisions required to bring sites forward.

Aligning strategic spatial plan with national policy
RE:UK commends the Plan’s intention to focus on strategic choices in a manner that allows boroughs and individual proposals to still respond to local circumstances. However, the Plan should also distinguish more clearly between matters requiring strategic or local planning judgement and technical matters already addressed through Building Regulations or consistent national standards, to avoid unnecessary duplication. It would also be helpful to explain how the approach aligns with national planning policy, particularly on housing need, Green Belt and growth around well-connected railway stations, and to clarify any differences.

Industrial & Logistics
RE:UK welcomes the draft London Plan’s recognition of the substantial unmet need for industrial and logistics land. This matters not only from the perspective of keeping London’s economy supplied, but in enabling the capital to support and benefit from the national drive to boost capacity and innovation in areas like advanced manufacturing, defence, and other key identified growth sectors. 

When considering the optimisation of industrial and commercial sites, the final Plan should take account of factors beyond additional floorspace, with policy recognising multiple forms of intensification and enabling development to reflect operational needs. Additionally, the GLA must explain how boroughs will identify, allocate and protect the required land across the range of industrial and logistics activities, particularly where housing pressure is acute.

Data Centres
The draft Plan’s dedicated data centres policy is welcome and sets a hopeful pathway for other SDS’s. Power and fibre connections cross borough boundaries, so these facilities need a strategic approach to network capacity and suitable locations. Data centres are a prominent need today, but the Plan will guide decisions for decades through a sustainable approach that balances the need for growth with utility capacity.