MPs Demand Retention of London’s Affordable Housing Quotas

Published: 20 October 2025. The English Chronicle Desk. The English Chronicle Online.

Labour MPs are pressing ministers and London’s mayor to abandon controversial proposals to reduce affordable housing quotas, warning that any easing could worsen the city’s housing crisis. The move comes amid growing concern over declining rates of new homebuilding in the capital and suggestions from government officials that lowering the quota could speed up construction.

The proposals under consideration by Housing Secretary Steve Reed and Mayor Sadiq Khan would allow developers to qualify for fast-track planning approval if they build just 20% of new homes as affordable, down from the current minimum of 35%. Labour MPs are mobilising to influence decision-makers before the measures are formally announced, arguing that reducing affordable housing targets would be a regressive step that harms local communities.

Florence Eshalomi, chair of the housing select committee, emphasised that tackling the housing crisis requires more than simply increasing the number of new homes; it is equally important to ensure that homes remain genuinely affordable for ordinary Londoners. “One of the main drivers of the crisis we are in has been the failure over many decades to build homes that are within reach of local people,” Eshalomi said. She noted that in London, developers frequently prioritise high-profit luxury units over homes accessible to the existing population, leaving many residents priced out of their communities.

Eshalomi added, “We must break with the failed status quo and build affordable homes that meet the needs of our communities.” Her comments reflect broader concerns within Labour that the proposed reduction in quotas would exacerbate long-standing inequalities in the capital’s housing market, undermining efforts to provide social mobility and economic security for lower-income households.

Stella Creasy, the Labour MP for Walthamstow, highlighted the local consequences of unaffordable housing, pointing to rising rents and gentrification that continue to displace residents and intensify poverty. “Walthamstow has been struggling with the impact of development for years,” she said. “We desperately need genuinely affordable housing and protections for tenants. I hope the mayor will hold firm that these targets matter.” Creasy’s remarks underline the human cost of policy changes that prioritise speed and profit over community stability.

Another Labour MP, speaking on condition of anonymity, stressed that while the government faces a genuine crisis in London housebuilding, solutions must not involve letting developers bypass their responsibilities to provide adequate affordable homes. “We understand there is a crisis in London housebuilding, but there must be a way to solve it which does not involve letting developers get away without decent levels of affordable housing,” they said.

Government officials have long been aware of slowing construction rates in the capital. Last week, two reports reinforced the urgency of action. An analysis by the Centre for Policy Studies revealed that only 4,170 new homes were started in 2024-25, a dramatic slowdown compared to previous years. Meanwhile, consultancy Molior projected that by the beginning of 2027, fewer than 15,000 homes could be under construction if current trends continue.

Internal memos obtained by the Guardian indicate that Reed and Khan are exploring multiple strategies to stimulate building, including the potential reduction of affordable housing quotas. Other ideas being considered include giving councils discretion to drop levies on developers that fund local infrastructure such as roads, schools, and GP facilities, as well as increasing subsidies for affordable housing.

Despite the intent to boost overall construction, campaigners warn that reducing affordable quotas could worsen London’s homelessness crisis and undermine social equity. Mairi MacRae, director of campaigns and policy at Shelter, cautioned that allowing developers to avoid building their share of social homes would leave families trapped in substandard conditions. “Families will be forced to continue enduring appalling conditions, watching damp and mould climb the walls with no hope of a secure home on the horizon,” MacRae said. Her statement highlights the immediate human impact of policy decisions in the housing sector.

A government source acknowledged that London’s housing sector is facing significant challenges. “Housebuilding in London is clearly in crisis,” the source said. They noted that since 2020, the number of homes under construction for private sale or rent at any one time has dropped by one-third to approximately 40,000, with only slightly more than 3,000 affordable homes started across the city in 2023-24. The source emphasised that the government has already increased funding for the affordable homes programme compared to previous administrations but admitted that the scale of need remains immense.

According to the source, the government is working with the mayor to maximise homebuilding, including social and affordable housing, while considering all policy levers at its disposal. “With so many Londoners stuck in temporary accommodation or on housing waiting lists that take years, we have to look at every lever to tackle the housing emergency we’ve inherited,” the source said. The statement reflects the balancing act faced by ministers between speeding up development and maintaining affordability standards.

The debate over affordable housing quotas in London reflects a broader national conversation about the intersection of housing supply, affordability, and economic inequality. While fast-tracking developments may increase the sheer number of homes built, critics argue that it risks undermining social cohesion and deepening divisions between affluent newcomers and existing residents. Labour MPs have therefore called for a more measured approach that prioritises the needs of ordinary Londoners.

Housing affordability has long been a critical concern in London. The city’s property market remains among the most expensive in the country, and high costs continue to push low- and middle-income residents into less desirable areas or out of the city entirely. Analysts have noted that supply constraints, combined with rising demand and inadequate policy measures, have created a market in which homeownership and secure rental options remain unattainable for many.

Labour’s push to maintain affordable housing quotas aligns with its wider commitment to tackling poverty and inequality in urban areas. By insisting on a minimum of 35% affordable homes in new developments, MPs argue that London can ensure mixed-income communities and prevent further socio-economic segregation. For residents who rely on social or affordable housing, these quotas can mean the difference between stable accommodation and prolonged housing insecurity.

The potential policy change also raises questions about the role of private developers in addressing social needs. While developers argue that lower quotas could make projects more financially viable and encourage investment, campaigners warn that profit-driven incentives must not come at the expense of the city’s most vulnerable populations. Labour MPs are seeking assurances from ministers and the mayor that affordability targets will not be compromised in the rush to accelerate development.

As discussions continue, both sides acknowledge the need to increase housing supply while protecting affordability. The coming weeks are likely to be critical, as ministers and the mayor weigh competing priorities and attempt to design a framework that balances speed, investment, and social responsibility. Labour MPs hope to influence these decisions by highlighting the long-term consequences of weakening affordable housing requirements.

Affordable housing advocates have stressed that securing the right balance is essential not only for addressing immediate housing shortages but also for ensuring London remains a city where people from diverse backgrounds can live and work. By maintaining ambitious targets, policymakers can help mitigate the social and economic pressures that contribute to homelessness, overcrowding, and unaffordable rents.