London Councils has welcomed the launch of the new National Planning Policy Framework, which it describes as an “important part of the jigsaw” for increasing housebuilding and delivering much-needed new homes and jobs in the capital.

The cross-party group highlights strong support among boroughs for planning reforms enabling councils to take local decisions about housebuilding on the ‘grey belt’, given the acute shortage of land for development of new homes and workspaces in London and the wider south east.

Boroughs warn that serious challenges are undermining London’s ability to deliver new homes, pointing to the pipeline of 286,000 homes that have already been granted planning permission in the capital but are waiting to be built.

Key factors affecting housebuilding include fast-rising construction costs in recent years, high interest rates pushing up mortgage costs and making homebuying more difficult for families on average incomes, the need for infrastructure investment (such as transport links and GP services) to make new housing viable, a shortage of skilled construction workers, and insufficient long-term funding for affordable homes.

Cllr Peter Mason, London Councils’ Executive Member for Planning and Skills, said:

“Boroughs are strongly in favour of housebuilding and growing London’s economy, and we welcome the clear direction being set by the government through the new National Planning Policy Framework.

“Planning reform is an important part of the jigsaw, but housebuilding in London faces an array of serious challenges, with spiralling construction costs, high interest rates, insufficient and overly rigid funding, and a lack of investment in local infrastructure posing significant financial barriers to the delivery of new homes. Alongside the Mayor of London, boroughs will continue making the case for the investment we need to unlock stalled sites in the capital and work with ministers to deliver the housing we all want to see.”

London is grappling with the most severe housing and homelessness pressures in the country. London Councils estimates that 183,000 Londoners – equivalent to over one in 50 residents of the capital – are currently homeless and living in temporary accommodation. There are around 320,000 households on social housing waiting lists in London.

Recent research suggests significant economic benefits can be achieved through improving housing affordability in London. The analysis, which was jointly commissioned by London Councils, the Mayor of London, Trust for London, and the G15 group of housing associations, found a one per cent increase in housing affordability in London could yield a boost of £7.3 billion in economic output over a decade.