Reed Cuts Housing Market Threshold to 20 Per Cent
Steve Reed has cut the housing market fast-track affordable housing threshold to 20 per cent from 35 per cent, an emergency move aimed at London’s stalled building pipeline. The change is meant to make large schemes easier to start, after private housebuilding in the capital fell sharply. Developers now face a lower affordability bar before projects can move through the fast-track route.
Steve Reed and London
20 per cent is the new threshold Reed announced this week, down from 35 per cent. The housing secretary first trailed the emergency measures last October, then moved to formalise them as London’s housing crisis deepened. The package is designed to address a market in which private schemes have become harder to start and harder to finance.
5,547 private homes began construction in London in 2025, down 84 per cent from 33,782 in 2015. That collapse gives the policy its edge: the change is aimed less at theory than at whether major developers decide the numbers now work well enough to break ground. For housebuilders, the question is not whether demand exists, but whether the planning route and the affordable housing burden leave a project viable.
Sadiq Khan and rents
£400,000 is the size of the Renters’ Rights Enforcement Fund that Sadiq Khan used to launch his latest intervention. In the same press release, he said: “I believe the next step is for ministers to devolve the power to cap rents so we can tackle the capital’s problems of both affordability and supply.”
That position runs into a direct market objection: the article says investors do not look at proposed carve-outs for build to rent with much nuance, and that rent caps have a negative impact on supply and affordability. The London Plan already says affordable housing needs to correspond with what is viable, which leaves the policy debate focused on where viability starts and who absorbs the cost when it does not.
Viability and forward funding
Overhanging issues include the botched Building Safety Regulator, tax reforms, the slowdown in China’s housing market and a ban on Russian buyers. The article says the loss of overseas buying has reduced forward funding for major developers, leaving London more dependent on domestic capital and a policy setting that keeps schemes financeable.
The practical test now sits with developers deciding whether the lower 20 per cent threshold changes enough to restart stalled land deals and large projects. If the figures move, London’s pipeline can begin to recover; if they do not, the capital stays short of the private starts that once carried the market.
