Sadiq Khan’s London ‘is a housing investment no-go zone’

Sir Sadiq Khan is making London a “no-go zone” for investment, housebuilders have warned.

The Home Builders Federation (HBF), a trade group, said the Mayor of London’s “unrealistic” affordable housing targets were “strangling” attempts to build new homes.

In a report on Monday, Neil Jefferson, its chief executive, said Sir Sadiq’s development strategy for the capital “effectively made London a no-go zone for housing investment”.

The Mayor has set private housebuilders a target of making sure 35pc of homes within each development are affordable, including social and council housing.

However, developers say that the target is too high because it is harder to make a profit, with schemes also stalled by delays because of its inflexibility.

The complexity of the Mayor’s London Plan was also identified as a major barrier because it contains 88 new policies that housebuilders must abide by. The HBF says this bureaucracy has made projects more costly and time-consuming.

Mr Jefferson said that because of Sir Sadiq’s policy, housebuilding in London was in “major crisis” and warned that the capital needs an “urgent overhaul of housing policy” to stem the “alarming decline” in new homes.

Planning approvals in the capital have fallen by 2pc in the 12 months to June, its lowest total since records began in 2006, according to the latest findings from the HBF.

Just 30,500 energy performance certificates (EPC), which assign energy efficiency ratings to properties, were granted for new homes in the year to June, in further signs of a slump in housebuilding.

The total is down 12pc on the number granted in the previous year, and represents the lowest level recorded annually since 2015.

The report underlines that delays caused by rules set by the Building Safety Regulator and a lack of equity support for buyers are also fuelling London’s shortfall in new homes.

“Without a London Plan that sets realistic requirements and provides suitable flexibility we will continue to see a decline in new homebuilding in the capital,” said Mr Jefferson.

“The Mayor and the Government urgently need to review their new levies and the costs of policies that are taxing home builders out of the market.”

The Government has set Sir Sadiq a target to deliver 88,000 homes a year. His office is in the process of reworking the London Plan.

The HBF says that output would need to rise by 175pc to hit that target, casting “serious doubt on the city’s ability to meet future needs” and contribute to the Government’s aim to build 1.5 million homes by the end of this parliament.

Separate findings from Rightmove show the average asking price of a house has fallen annually for the first time in 18 months, with London and the South dragging down activity.

The average asking price has slipped by 0.1pc to £370,257 across the country. In London, house prices are 1.1pc below where they stood in the previous year.

A spokesman for the Mayor of London said: “The disastrous inheritance from the previous Government has left national housebuilding on its knees.

“The Mayor is doing everything in his power to deliver more homes of all tenures, taking hard decisions including actively exploring development on the green belt.”

A Ministry for Housing, Communities and Local Government spokesman said: “These figures are disappointing – and a result of the housing crisis we have inherited.

“We will leave no stone unturned to build 1.5 million homes and restore the dream of homeownership to families across the country.”