House Building: London

Debate between Matthew Pennycook and Bob Blackman

Wednesday 5th November 2025 Westminster Hall

[The Minister for Housing and Planning (Matthew Pennycook)]

It is a pleasure to serve with you in the Chair, Mr Mundell. I start by congratulating the hon. Member for Old Bexley and Sidcup (Mr French) on securing this important debate, and I thank other hon. Members who have spoken for their passionate and—with some notable exceptions—thoughtful contributions. It has been a good debate. I also welcome the shadow Housing Minister, the hon. Member for Orpington (Gareth Bacon), to his place. It is a pleasure to debate opposite him, and I thank him for the kind words he said about me in particular.

It is not in dispute that house building in London is in crisis. The causes of that crisis are multifaceted. London has faced development challenges common to all parts England over recent years, including a significant increase in the price of building materials, a rise in financing costs, and planning capacity and capability pressures. However, it is important to recognise that the capital also faces a number of distinct challenges unique to its housing market that differ in important ways from the rest of the country.

Those challenges include the fact that London is overwhelmingly reliant on flatted developments that have become more challenging to deliver over recent years. It has depended over recent years on demand for international buyers and investors, whose appetite to purchase private market homes has diminished. It also has a higher proportion of landowners, and traders acting on their behalf, who are global investors allocating development funding based on competing returns globally and across asset classes. The combination of those and other factors has resulted in a perfect storm for house building in our capital. That perfect storm has real-world implications for Londoners in housing need.

As you will know, Mr Mundell, as part of our overhaul of the national planning policy framework in December last year, we addressed the fantastical housing target of over 100,000 given to London by the previous Government. That target was based on the punitive application of the now-abolished urban uplift, and it bore no relation whatsoever to addressed housing need in our capital. However, London is still falling far short of the more appropriate target of 87,992 homes per year, which results from the new standard method that we put in place.

We have heard the statistics cited by many hon. Members. Overall home starts in London in 2024-25 totalled just 3,990. In the first quarter of this year, more than a third of London boroughs recorded zero housing starts. I do not mean to single out the hon. Member for Old Bexley and Sidcup—this applies across the board—but in the borough of Bexley, construction was started on just 160 homes, and completions numbered just 210, in the whole of 2024. Those numbers are far too low. In short, London housing delivery is on life support, as is broadly recognised across the Chamber.

In the first 15 months of this Government’s life, we took steps to support the mayor and the GLA in addressing the house building challenges facing the capital. We withdrew the previous Government’s direction of March 2024, which required the GLA to complete an unhelpful, partial review of the London plan, and we have provided the GLA with certainty on grant by making it clear that up to 30% of our new £39 billion social and affordable homes programme will be allocated to London.

However, although those and other vital interventions were beneficial, the Government concluded over the summer that we had no choice but to take further decisive action. That is why, on 23 October, via a written ministerial statement, as is often the case—it was not snuck out; it was published on the Government website for all to see—the Secretary of State and the Mayor of London announced new emergency measures designed to arrest and reverse the collapse in house building in London by lowering development costs and improving scheme viability. The time-limited emergency measures, which I should stress to hon. Members are subject to consultation, are as follows.

First, we will introduce mandatory partial relief from borough-level community infrastructure levy charges for qualifying brownfield residential schemes that start construction before the end of 2028. As hon. Members will be aware, CIL funds strategic infrastructure, such as schools and health facilities, but if no development is taking place, boroughs do not benefit from CIL payments. The more schemes we can get moving, the more CIL funds flow into borough coffers. The reliefs we have announced will cover 50% of the CIL charges for schemes with at least 20% affordable housing, with greater relief for higher proportions of affordable homes, to incentivise house builders to deliver more.

Secondly, we will remove elements of planning guidance that can constrain density. The mayor, supported by Government, will consult on revising guidance in respect of dual aspect requirements, the number of dwellings per core and cycle storage standards. Looking ahead, the next London plan will streamline requirements to reduce duplication and complexity, making it easier to build homes quickly, without compromising quality.

[Bob Blackman]

Do the new standards apply to new planning applications that are being considered or to ones, already in the pipeline, in which developers have proposed developments with less affordable housing?

[Matthew Pennycook]

As I have said, there will be consultation on the specifics of many parts of this package, but I will address his particular point about the new time-limited planning route. This route, which will be open for two years, will allow schemes on private land in London to proceed without a viability assessment, provided that they deliver at least 20% affordable housing—importantly, with a minimum of 60% social rent. To incentivise schemes to come forward on this basis, grant funding will be made available for homes above the first 10%, which will remain nil grant.

Crucially, a gainshare mechanism on schemes or phases of schemes not commenced by 31 March 2030 will ensure that, if market conditions improve, communities benefit too. In our view, that is a pragmatic, temporary measure to unlock delivery now, while maintaining our commitment to affordable housing in the long term. It will sit alongside the GLA’s existing fast-track route, which retains its 35% affordable housing threshold.

Building Homes

Debate between Matthew Pennycook and Bob Blackman

Thursday 12th December 2024 Commons Chamber

[Matthew Pennycook]

My hon. Friend has real expertise in this area. We are making a distinction between social rented homes—the most affordable type of affordable housing—and others, and we have sought to express that through a change to the glossary in the framework that separates social rented housing from other forms of housing. He is right that brownfield delivery involves additional challenges. We are very cognisant of those, and we are exploring how the variety of Government funds that support the delivery of brownfield sites might be improved as we go forward.

[Bob Blackman (Harrow East) (Con)]

The Minister has alluded to one of the challenges with planning permissions—namely that, on any one day, there are something like 1 million unbuilt permissions for new housing. Developers ration the supply in order to keep the price high, so will he consider, as I think he did in opposition, the principle of “use it or lose it”? At the moment a developer will get a permission, which is repeatedly sold on until viability means the site cannot be developed. If the planning permissions were either brought forward or lost if they were not used in time, we could get the houses and homes that people want.

[Matthew Pennycook]

The hon. Gentleman, like my hon. Friend the Member for Sheffield South East (Mr Betts), has great expertise in this area. He will know that local authorities already have powers to issue a completion notice to require a developer to complete a stalled development. To bring greater transparency and accountability to this area, we seek to go further by taking the necessary steps to implement build-out reporting. I assure him that I am giving a lot of attention to what more we might do on build-out, because developers have made commitments to increase the pace of build-out across the country. We need to make sure they follow through with that.

Council Tax

Debate between Matthew Pennycook and Bob Blackman

Thursday 14th November 2024 Commons Chamber

[Matthew Pennycook]

My hon. Friend is absolutely right. The damage done to local government over the 14 years in which the Conservatives were in office is profound. We have inherited, as I said, a system on the verge of collapse. We are absolutely committed, as part of rebuilding that system from the ground up, to a fair funding settlement. As I say, the Minister for Local Government will announce more details in the upcoming local government finance settlement in the new year.

[Bob Blackman (Harrow East) (Con)]

Local authorities across the country will welcome multi-year settlements, so they can plan for the future. However, does the Minister have any plans whatever for a revaluation of properties, given that properties were originally valued back in 1992, when council tax began? The hon. Member for Sheffield South East (Mr Betts) and I produced a Select Committee report on what could be done to ensure that councils need not be strictly neutral in terms of finance, and could revalue properties to bring valuations up to date.

[Matthew Pennycook]

The hon. Gentleman tempts me to discuss the local government finance settlement ahead of it being formally presented to the House. I am afraid I cannot do that, but the Government have heard his point, and I will ensure that it is passed on to the Local Government Minister.