In 2022, DP9 and DS2 partnered with BusinessLDN on Delivering Affordable Workspace in London, a report exploring how the 2021 London Plan Policy E3 (Affordable Workspace) was operating in practice. The policy’s goal was to ensure the capital’s start-ups and SMEs could still access low-cost workspace in areas where rising rents were pushing them out. For many developers we work with, affordable workspace (AW) offers placemaking opportunities and a way to deliver meaningful ESG impact, particularly through meanwhile use on sites awaiting regeneration.
But the policy has not delivered as intended on the ground, with several boroughs introducing standardised AW policies that apply across their whole area, resulting in a proliferation of Grade A office space, even in locations where there is little or no demand for that type of space. As a result, there are many examples across London of AW units lying vacant for prolonged periods.
With a new London Plan in preparation, the findings and recommendations of our 2022 report are more relevant than ever. However, Annex 1 to the report – which summarised local plan AW policies across London – has since become out of date. In response, DP9 has undertaken a thorough review and updated Annex 1 as of January 2026 to understand how the policy landscape has evolved over the past four years. Read the updated Annex 1 here.
Since our 2022 report was published, eight local authorities have adopted AW-related policies, and a further eight local authorities have emerging AW policies in the pipeline. Consequently, only seven London boroughs (Bexley, Croydon, Harrow, Hillingdon, Merton, Redbridge, and Sutton) do not have specific AW requirements. Of those that now have an adopted policy position, we still see the majority applying blanket policies across the borough without consideration for local nuance.
Newly emerging policies and recently adopted SPDs demonstrate a trend towards an increasingly prescriptive approach, with terms clearly defined. Whilst this approach provides upfront certainty to developers, it does not give them sufficient flexibility to adapt to longer-term, localised market conditions. In line with London Plan Policy E3, the application of local policies is subject to viability. Whilst, in theory, this provides flexibility, in practice, it often leads to protracted viability negotiations, thereby creating uncertainty and delay.
These shifts in local plan policy are set against a backdrop of significant changes in London’s commercial property market, which call into question whether the London AW policy is still appropriate. There is now substantially more low-cost commercial floorspace available to rent on the open market. At the same time, financial pressures on new commercial development have significantly worsened, demanding prioritisation of competing planning-gain objectives.
Despite this very different market context, the Mayor’s Towards a New London Plan consultation (May 2025) signalled that AW policy would not only be retained but potentially expanded to include all Class E town centre uses. We believe a more flexible approach is needed – and one more closely aligned with localised need.
Policy should also recognise that affordable workspace does not always need to take the form of dedicated physical premises. In some cases, high-quality support services, such as shared administrative support and business coaching, deliver greater value to local businesses than workspace units. There also needs to be a clearer assessment of the trade-off between AW and other planning-gain objectives – including affordable housing in mixed-use schemes and, crucially, development viability, given the risk and uncertainty it can bring to projects as well as actual cost.