Sir Sadiq Khan will continue to oppose Heathrow airport’s third runway plan, according to the draft new London Plan, the blueprint for development across the city over the next two decades, published today. In a snub to government ambitions, the draft says that Heathrow expansion “should be refused unless no unacceptable environmental, transport and congestion impacts are demonstrated.”
But a more surprising headline feature is the draft Plan’s rejection of the government’s target of 85,000 new homes a year for the capital, amounting to 850,000 by 2036. Instead, the Mayor has set his own target of 558,000 additional new homes over the coming decade, balancing need against what the draft Plan argues could “feasibly be deliverable” and proposing detailed delivery numbers for each of London’s 33 local authorities.
The new target, the Plan says, reflects the current “difficult economic conditions for housebuilding in London” – a “perfect storm”, as Khan puts it in his introduction to the document – due to a “combination of high interest rates, the rising cost of construction materials, the legacy of the pandemic, a shortage of skilled workers and the lasting impact of Brexit”.
Jules Pipe told On London: “The draft London Plan identifies a target for 558,000 new homes over the next decade, based on the evidence, and securing key transport infrastructure investment. This is the most ambitious and credible plan for delivering more homes now, while also setting out how London can unlock significantly more homes over the longer term.”
Councils may welcome being set a lower target than the government’s, but the totals are still challenging. The draft Plan calls for more development on all fronts: on previously-developed brownfield sites first, but also on small sites; more “mid-rise” suburban and town centre “densification”, particularly around stations; well-connected industrial sites which could be re-designated for housing; and, perhaps most controversially, an easing of long-standing restrictions on building in the capital’s extensive Green Belt.
Under the draft Plan’s policies, 90 per cent of new development would still be on brownfield sites, but the the document identifies potential space for some 56,000 homes on Green Belt land in eight boroughs: Barking & Dagenham, Barnet, Croydon, Harrow, Havering, Hillingdon, Redbridge and Enfield, where plans have already been proposed (and vehemently opposed by some) for a New Town scheme at Crews Hill. Brownfield land alone “cannot meet London’s long-term housing needs”, according to research underpinning the Plan, City Hall said.
Boroughs will also be pondering the draft Plan’s second major departure – a new, three-tier, system of incentives for developers to devise schemes that contain minimum percentages of homes deemed “affordable” by the Mayor. Planning application that meet these “thresholds” are rewarded with a “fast track” route by City Hall’s planning gatekeepers, whereas those that fall short become subject to lengthy “viability” assessments.
City Hall’s original, Londonwide 35 per cent minimum threshold was dropped to 20 per cent last year as part of an emergency package designed to support developers facing increasing financial challenges and plummeting demand for the homes they build.
The new approach will see the 35 per cent threshold restored from 2028 for 12, mainly inner London boroughs: Wandsworth, Lambeth, Southwark, Hammersmith & Fulham, Kensington & Chelsea, Westminster, Camden, Islington, Hackney, Tower Hamlets, the City of London and Richmond upon Thames.
A mostly “middle” ring of eight boroughs, Merton, Lewisham, Greenwich, Newham, Waltham Forest, Haringey, Brent and Ealing, will be subject to a 25 per cent threshold, while that for the remaining 13 outer London boroughs will be set at 20 per cent. Separately, the draft proposes that the thresholds for Green Belt and publicly-owned land be set at 50 per cent and 40 per cent respectively.
The proposals reflect what City Hall calls “updated evidence on development viability across the capital”, showing that “this is the best way to unlock more housing delivery and maximise the delivery of affordable homes for Londoners,” the Plan says. Khan’s ambition remains to return to 35 per cent thresholds across London “as economic conditions allow“. Applications can exceed the threshold where feasible, and improved viability data would allow boroughs to move to a higher banding under the “flexible” policy.
As well as that uptick in the economy boosting affordable quotas, City Hall says that the entire 558,000 target – which includes some 220,000 low-cost rent and 120,000 “intermediate” homes over the decade – would “need to be underpinned” by investment in transport and community infrastructure, with support from national government.
That support should include cash for the Bakerloo line extension and the West London Orbital rail plan and more Transport for London control of suburban rail lines. A significant hike in affordable homes funding would be required too, over and above the current record £11.7 billion 10-year allocation, which is expected to fund only some 53,000 homes.
The draft Plan represents a challenge to the boroughs, which will need to bring their statutory Local Plans into “general conformity” with the London Plan, including on the release of Green Belt land, and also to the national government. The influential business group BusinessLDN has already called for Whitehall to “devolve powers and resources to enable London to invest in the infrastructure projects that are critical to unlocking sites for housebuilding and development across the city”.
There will be plenty of debate about the draft Plan’s policies on housing, but also its wider proposals, which address its other main focus of delivering growth and supporting the “economy of the future” while maintaining City Hall’s long-standing sustainability commitments.
What is becoming clearer though is that, as Khan said, “change will come to more parts of London as we seek to accommodate new homes and jobs”. He referred to his own challenge too: “If we avoid making the necessary decisions and bold choices, the significant long-term challenges the city faces will deepen further. This would leave us with a city that is unaffordable for an ever-increasing number of people. “
The draft Plan is out for public consultation for 13 weeks, until 15 October. A further draft will undergo a formal Examination in Public next year by independent planning inspectors, prior to a Whitehall sign off, which is expected in early 2028.
Follow Charles Wright on Bluesky. This article was updated at 8:20pm on 16 July, 2026 with the addition of the quote from Jules Pipe.
OnLondon.co.uk is funded by sales of publisher and editor Dave Hill’s twice-weekly newsletter On London Extra. To receive it, become a paying subscriber to Dave’s personal Substack. Thanks.