London’s housing market is facing its most challenging period in years. High interest rates, spiralling build costs, and regulatory changes have slowed construction starts to a halt. Molior data shows just 3,248 private starts in the first three quarters of 2025, compared to 60,000–65,000 homes under construction annually between 2015 and 2020.
Against this backdrop, on 27th November, two consultations were announced on a package of emergency measures aimed at accelerating housing delivery and boosting affordable homes in the Capital. These consultations are on the following:
(1) Draft London Plan Guidance (LPG) proposing a package of measures which include changes to the housing design standards, a new time-limited planning route for affordable housing, grant funding incentives and temporary CIL Relief. In addition, the GLA has also published an update to the Accelerated Funding Route (AFR) to provide a simplified approach to calculating GLA grant funding. More information on this can be found here; and
(2) MHCLG Emergency Measures which set out the required amendments the Government must make to secondary planning legislation in order to facilitate implementation of the allowance for temporary relief from CIL referenced above; and greater Mayoral powers in relation to planning applications of potential strategic importance (PSI). More information on this is set out below.
What’s in the Package?
In order to facilitate and support the packages of measures detailed in the Draft LPG, the MHCLG consultation sets out proposed changes to secondary legislation which covers two core components:
1. Temporary CIL Relief
A time limited minimum 50% relief from borough CIL for qualifying developments where full CIL liability is demonstrated to have viability constraints. Whilst there are presently provisions in place for Exceptional Circumstances to give relief for borough CIL (CIL Regulation 55), there are restrictions on where and how this can operate. This new relief however would broaden its accessibility and, most importantly, allow it to operate alongside other reliefs such as Social Housing Relief.
The qualifying criteria which must be met for a scheme to be eligible for this relief are:
- Must be located in a CIL Charging Authority area of Greater London;
- Must be located on land that is not designated Green Belt, Metropolitan Open Land, a park, recreation ground, allotment, golf course or any other locally designated open space;
- Must be for development in residential use (excluding student accommodation and co-living);
- Attracts a borough CIL liability of over £500,000 when factoring in other existing reliefs. This is based on the CIL Liability for the development as a whole rather than for individual phases;
- Must provide at least 20% affordable housing by habitable room comprising 60% Social Rent. The 50% relief will step up to 80% in the event 35% affordable housing is delivered.
In order to secure this relief, an application must be made to the LPA. The process is set out below:
- Whilst the prospect of CIL Relief can be discussed with the LPA pre-application, applying for such should come after the S106 Agreement is signed and grant funding is agreed;
- Developers must pay a set fee of £25,000 in order to apply for the relief.
- Developers must provide the LPA as part of their relief application, viability evidence which demonstrates the impact the full CIL Liability would have on development viability; and a signed statutory declaration.
- The relief should subsequently be granted by an LPA where they consider that it would make the development viable.
Other key points of note include:
- The relief will be available for developments from the point the CIL Regulations are amended; up until 31st December 2028.
- Schemes which have received planning permission prior to the relief’s introduction and have not yet commenced will be eligible. However, schemes already commenced will not.
- There will be a clawback provision in place to avoid developments benefiting from relief without the intention of delivering affordable homes in a timely manner. These will be tied to (a) build out to ensure a scheme is not nominally commenced only to benefit; and (b) affordable housing to ensure the final quantum is not subsequently reduced.
2. Permanent Changes to the Mayora’s Existing Planning Powers
Presently under the Mayor of London Order (2008):
- Applications which, under Schedule 1, are PSI and comprise 150 homes or more are referred to the Mayor. Where an LPA resolves to grant or refuse, the Mayor can decide whether the LPA decision stands.
- For applications for buildings 1,000sqm+ or more on Green Belt or Metropolitan Open Land which the LPA resolves to grant, the Mayor can direct refusal but not to call in.
Two primary changes are now being consulted on:
(1) The creation of a streamlined process for the Mayor to call in applications for developments of 50+ homes where an LPA is minded to refuse. Key points to note:
- Whilst the Mayor will be notified when an LPA receives such an application, there is no requirement for the GLA to respond via the Stage 1 process;
- Where an LPA proposes a refusal of such an application, they would be required to notify the Mayor as part of a modified Stage 2 process. The Mayor will then have 21 days to consider whether to call the application in;
- The Mayor would not have power to direct refusal nor would an applicant have the ability to request the Mayor intervene.
(2) A new provision to give the Mayor the ability to call in applications for buildings of more than 1,000sqm on Green Belt or Metropolitan Open Land where an LPA has resolved to refuse. Whilst such schemes are modest in scale, the MHCLG Consultation notes these are of no less strategic importance and in certain circumstance, very special circumstances may be deemed to exist.
What Does This Mean for Developers?
With thousands of homes consented but not started, the draft LPG and facilitating secondary legislation changes proposed by MHCLG seek to offer a pathway to accelerate delivery and maintain affordable housing levels during a difficult market. The consultations offer the opportunity to set out any changes / additions considered necessary to better bolster housing delivery in London.
Developers should engage with both consultations, which are now running for six weeks until Thursday 22 January 2026.