London’s housing crisis has reached an inflection point. The Government’s ambitious targets now call for 88,000 new homes a year across the capital — a huge increase made even more daunting by the reality on the ground: in the first quarter of this year, 23 of London’s 33 boroughs recorded zero housing starts.
Ramping up delivery through partnership between the public and private sectors was the key area of focus for our latest Westminster dinner last week, sponsored by PIC. It brought together members with MPs and leading figures from City Hall, including Florence Eshalomi MP, Rachel Blake MP, Tom Copley — Deputy Mayor for Housing and Residential Development — and James Small-Edwards AM.
The obstacles to increasing housing supply are as entrenched as they are multifaceted. The planning system, even after welcome recent reforms, remains sluggish and under-resourced. The determination of planning applications continues to take too long, holding up the supply of consented sites needed to form a viable pipeline for future development. The risk is clear — if permissions cannot be granted quickly and efficiently, the pace of housebuilding will remain glacial.
Compounding this is a dense regulatory thicket. The introduction of the Building Safety Regulator and the gateway system is a necessary step to ensuring post-Grenfell safety standards. Yet without sufficient resourcing — and, crucially, a more agile approach such as conditional approvals — this system risks becoming a bottleneck that prevents London and other parts of the country building the homes they need.
Even if these barriers were to be cleared, the workforce required to meet the 88,000-home target simply does not exist. The skills gap in the UK construction sector is a long-term challenge that requires investment in training, education, and a renewed commitment to vocational routes. Put simply, without people to build the homes, no amount of planning permissions or capital investment will deliver the scale of output required.
Unsurprisingly, all of these issues feed into one central concern: viability. When costs are rising, risks are high, and outcomes uncertain, capital looks elsewhere. For developers and institutional investors alike, housing in London has become a high-stakes gamble. And without the right framework, the money that wants to come into the sector — and it does exist — will find easier, safer homes abroad.
Yet this challenging picture is not without rays of optimism. Public-private partnerships, once tarnished by legacy projects and mistrust, are undergoing a quiet rehabilitation. They represent one of the most promising tools available to de-risk development and make schemes viable. But this will require a shift in both narrative and structure — moving beyond blame and towards collaboration, pragmatism, and results.
Political certainty, for the moment, is on our side. This stability offers a window of opportunity to align investment with broader regulatory and infrastructure reforms. Positive steps — such as improvements in energy grid connections and a more streamlined approach to delivering major projects — signal that parts of the system are finally starting to move in the right direction.
That status quo is not an option. London councils are spending £4 million a day on temporary accommodation. Together we must deliver a more sustainable solution. In one of the wealthiest cities in the world, the only way out is through building our way forward.