The real reasons why Sadiq Khan has failed to fix London's housing crisis

Mired in regulation and hit by rich foreign investors fleeing, house building in the capital has all but ground to a halt. Will Khan's green belt U-turn really help, asks Jonathan Prynn

- Jonathan Prynn

The message could not have been clearer. In his 2016 manifesto for his first mayoralty Sadiq Khan laid out his position: “I will oppose building on the green belt, which is even more important today than it was when it was created.” How times have changed. Last week in a speech that represents one of the biggest shifts in planning policy in and around London since the post-war period, the Mayor was singing a different tune.

He admitted he had shifted his opinion of what he once described as the “sacred” status of the green belt, saying current protection is “wrong, out-of-date and simply unsustainable”.

So what has brought about this remarkable volte-face? The simple truth is that the housebuilding model in London is broken. Starts on new homes in Europe's biggest metropolis have virtually ground to a halt. The figures are truly astounding.

According to sobering data from analysts Molior, private developers started work on just 1,210 new homes in the first three months of the year, a tiny sliver of the 88,000 new homes a year envisaged by the London Plan over the next decade.

The comparison with a decade ago is stark. In the first quarter of 2015 work started on 9,117 new unsold homes — a good indicator of developer confidence — at 100 major sites. In the first quarter of the year this had dried to a dribble, with a meagre 323 starts on new unsold homes, at just six sites.

It is the same gloomy story for affordable housing, most of which is delivered by private developers working with housing associations and City Hall. Latest GLA data shows work began on just 4,411 new homes designated affordable in the year to April, up slightly from the previous year when the total was just 3,244, but hugely down on the 27,824 in 2022/23.