Legal battle brews over London's affordable homes target

Three London councils said they have launched a legal challenge against the mayor of London over his decision to adopt a policy which includes reducing affordable housing targets in the capital.

Tower Hamlets, Hackney and Lewisham have requested a judicial review, claiming the mayor did not use the proper statutory process or consult councils before the policy change was made.

The mayor, Sir Sadiq Khan, who said he cannot comment on ongoing legal proceedings, previously said he was unwilling to stand by "when house-building dried up".

The leaders of the three councils argued Sir Sadiq's policy had a detrimental impact on their ability to deliver the highest levels of affordable housing.

In October 2025, the government and the mayor of London agreed to change the quota for the amount of affordable housing for new developments in London from 35% to 20% as London's house building stagnated.

While the government expects the capital will need 88,000 new homes per year to meet the city's housing needs, figures show just 31,000 net additional homes were built in London in 2024-2025.

City Hall has previously argued that the measures were introduced to help speed up planning decisions, incentivise developers and build more houses, as its figures show that just 3,991 affordable homes were built in 2024-25.

Developers are promised a fast-tracked application if they agree to build 20% of affordable housing in their plans.

Mayor of Hackney for the Green Party, Zoe Garbett, said the housing situation in her borough was "desperate".

In Hackney, there are almost 8,000 households on the waiting list for council housing and 3,500 families living in temporary accommodation.

She has claimed "local authorities haven't been properly consulted" and accused the mayor of London of "removing their decision making" and "bowing to developers".

Hackney Council's own planning rules require developers building homes in Hackney to offer at least 50% at affordable levels, subject to a viability assessment.

Garbett refuted the suggestion the legal challenge would obstruct the mayor.

"We're not getting in the way - we're saying, let's work together to stand up against developers," she said.

It comes amid record levels of people living in temporary accommodation with some of the highest social-housing waiting lists the city has experienced, leading London councils to spend £5.5m a day on homelessness.

BBC Verify analysis of government data suggests there has been a decrease in house building across the country, and showed that 99 areas out of 294 in England would need to more than double the number of new homes they had in 2025 to meet their annual target this year.

Ian McDermott CBE, the chief executive of the Peabody housing association and the chairman of the G15 - an umbrella group of London's largest not-for-profit housing associations - said there were serious challenges when it comes to funding and building affordable homes.

McDermott said: "Rising costs and tough economic conditions mean many affordable housing developments are struggling to stack up financially and the system is under increasing strain."

Mayor of Tower Hamlets, Lutfur Rahman, said he would prefer a borough-by-borough approach rather than a uniform 20% target across London.

He said affordable housing targets in Tower Hamlets have remained viable, claiming that no developers had withdrawn from schemes because of the borough's requirements.

Rahman has also said councils should "stick to their guns" on housing targets, adding that developers valued "certainty and clarity" in the planning system.

He warned that lowering affordable housing requirements could have a serious impact on overcrowding in the borough, where more than 31,000 people (one in 36 residents) remain on the housing waiting list.

Mayor of Lewisham for the Green Party, Liam Shrivastava, criticised the proposed changes as "political theatre".

He argued that no-one wanted the emergency measures and pointed to empty developments in the borough as evidence that the issue was not simply a lack of housing supply.

There are 10,500 households currently on Lewisham Council's housing waiting list. Nearly 14,000 households – 11.5% - are living in overcrowded conditions.

Shrivastava said the move put both the government and the mayor of London "on notice", arguing councils should not accept lower affordable housing targets.

He also highlighted Lewisham's delivery of 1,000 social rent homes and insisted the borough would not accept "crumbs from the table" in place of genuinely affordable housing.

Steve Turner, from the Home Builders Federation, which represents private sector housebuilders in England and Wales, said: "We are supportive of the measures to reduce the affordable housing requirements on every site, on the basis that, basically, housing supply in London has collapsed, and one of the main reasons for that is that sites are simply not viable.

"By insisting on a level that's too high as a blanket, whether it be at a borough level or a citywide level, you're going to prevent houses coming forward."

Nick Bano, specialist housing barrister at Garden Court Chambers in London, said local authorities are arguing about "the extent to which they were consulted before the new rule was brought in".

As "the ones who are going to have to make planning decisions", they are "very, very heavily affected" by the policy and have "a strong argument that they should have been consulted thoroughly, and their view should have already counted".

The legal challenge has been served on the Greater London Authority (GLA).

As mayor, Sir Sadiq Khan is the GLA's executive and is responsible for its core functions: transport, policing, fire and rescue, planning and housing for London.

Commenting on the challenge, Green Party leader Zack Polanski said: "Every single one of the Green councils elected in London is backing this legal challenge to fight for affordable homes, alongside Tower Hamlets Council.

"Green mayors fight for a housing and planning system that works for people, not profit, while Labour mayors cut affordable homes."

Two of the councils involved in the challenge - Hackney and Lewisham - are former Labour-run boroughs where the Green Party won control in the local elections in May.

The action comes as Andy Burnham is being tipped as the man who may become the next prime minister, after Sir Keir Starmer announced he was stepping down outside Downing Street on Monday morning.

In his campaign launch speech, Burnham said he wanted "the biggest programme of council house building since the Second World War".

He suggested this could be funded by rediverting the existing £39bn affordable housing programme entirely to social rent homes.

Previously, Sir Sadiq Khan said: "Homes being built in London have dried up and it's a nationwide problem.

"I'm not willing to stand by when that happens and so working with the government we've announced today a temporary short-term package of emergency measures to kickstart house building in London."

City Hall has said that the scale of the housing crisis in recent years means "emergency action is needed to get building moving".

The government said that a "perfect storm due to a combination of spiralling construction costs, high interest rates, the legacy of the previous government, impact of the Covid-19 pandemic, regulatory blockers and wider economic conditions," had created an urgent need for more housing.

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