The changes also include new powers for the Mayor to review and call-in housing schemes of 50 homes or more where boroughs are minded to refuse, and £322m of initial funding for a City Hall Developer Investment Fund.

Housing secretary Steve Reed commented: “Getting spades in the ground in London is crucial if we want to see the biggest increase in social and affordable housing and meet our target of delivering 1.5 million homes in our Plan for Change.

“I have worked closely with the Mayor of London to give the capital the shot-in-the-arm it needs to ensure more Londoners have an affordable home of their own.”

Industry professionals have given their say on the new measures

Daniel Austin, CEO and fo-founder of specialist real estate lender ASK Partners, said: “The proposed reduction of the affordable housing requirement to 20%, alongside a fast-tracked planning route, is a constructive step toward improving the viability of schemes in London.

“For many developers, however, even this lower threshold may not go far enough to make projects financially feasible given ongoing pressures from high construction costs, tighter debt markets and uncertain exit values.

“Easing planning constraints and providing temporary relief on levies will help get stalled sites moving, but the challenge extends beyond the supply side. The government must also do more to stimulate demand from potential buyers.

“Measures such as supporting first-time buyers, reforming stamp duty, and offering incentives for domestic purchasers to buy off-plan would help restore confidence and liquidity in the sales market.”

Alister Henderson, partner at Carter Jonas, added: “Possibly the most significant of these measures is the is the proposed temporary drop in affordable housing requirements, with viability reviews required only for schemes proposing fewer than 20% affordable homes.

"While the reduction in affordable housing will be a disappointment to many, hopefully the measures will help to deliver more homes in London and increase the overall numbers of affordable homes coming forward.

•   The Finance Professional Show 2024: The Video
•   Govt invests £500m in Oxbridge 'growth corridor'
•   New govt powers proposed to 'sweep aside' council delays

“The problem of housing supply in London is a deep-rooted one which has been building over months and years as a result of inflation, the impact of the Building Safety Act, and a lack of consumer demand for housing. It is important that the duration of these measures is taken into account that the problem which has built over time and cannot be resolved swiftly. And there must be sufficient flexibility to allow the measures to function as effectively as possible and future funding will be key for delivery of more affordable homes.”

James Cogan, director at Boyer, commented: “The proposed temporary reduction in affordable housing to 20% and introduction of temporary CIL relief are, in my view, the most significant measures for developers. Both will make a real difference to the viability of schemes that might otherwise have been shelved.

“Greater Mayoral intervention in planning applications is also notable, with the scope for intervention reduced from 150 to 50 home schemes. This could be positive provided the Mayor’s office has the capacity to manage the additional caseload and the Mayor is willing to overturn local decisions. While it doesn’t change the fundamentals of the planning process, it does signal a more active role for the Mayor in directly tackling the housing crisis by approving more applications.

“The six-week consultation period starting in November means these measures are unlikely to take effect before the new year — and with the reduced 20% affordable housing rate applying only to permissions secured by 31st March 2028, the window of opportunity is limited.

“In reality, the changes will benefit those applications already in the pipeline or those that have been approved but have not commenced on-site due to viability issues.

"We can expect a rush to get permissions granted before the 31st March 2028 cut-off, but more immediately we will see a flurry of applications to amend existing permissions to enable them to benefit from the reduced affordable housing requirement and additional CIL relief. These will add to the workload for local planning authorities across London."

Simon Cox, managing director at Walter Cooper, said: “Our housing crisis is fundamentally down to a lack of development, so while on the surface a reduced target of 20% may appear to dilute social housing stock, actually I suspect we’ll see figures increase as more developments are brought forward. 20% of a £1 is better than 50% of nothing, which is what we were facing prior to these measures.

“This is a Londoncentric announcement, however, if proven successful then there is no reason why this shouldn’t be used as a blueprint for delivering housing quicker across other regional cities struggling to progress build programmes.”