Councils Sue Sadiq Khan Over Affordable Housing Cuts: London 2026

Key Points

• Legal Action Initiated: Several London local authorities have filed a Judicial Review claim in the High Court against the Mayor of London, Sir Sadiq Khan, and the Greater London Authority (GLA). Evening Standard
• Policy Dispute: The legal challenge explicitly seeks to halt emergency planning modifications designed to lower the fast-track affordable housing quota from 35 per cent down to a 20 per cent threshold. Evening Standard
• Council Coalition: The legal bid is led by the independent-led London Borough of Tower Hamlets alongside the Green Party-led administrations of Hackney and Lewisham, with backing from Lambeth, Southwark, Waltham Forest, and Haringey. Evening Standard
• Opposing Arguments: Local authority leaders argue the reduction will turn London into an “investment asset for the super-rich”, while City Hall and the Ministry of Housing argue the temporary measure is vital to revive stalled, financially unviable developments amid soaring building costs. Evening Standard

Tower Hamlets (East London Times) June 24, 2026 — A coalition of London local authorities has today launched formal High Court legal action against the Mayor of London, Sir Sadiq Khan, challenging emergency planning amendments that reduce affordable housing quotas on new private developments. The Judicial Review claim, which has been served on the Greater London Authority (GLA), alleges that the policy shift will severely restrict the capacity of individual boroughs to secure high levels of affordable and social housing for their local residents.

Why are London Councils Taking the Mayor to the High Court?

The legal dispute centres upon a joint emergency policy framework introduced by the Mayor of London and the Ministry of Housing, Communities and Local Government (MHCLG). As reported by Adam Carey of Local Government Lawyer, the policy creates a new, temporary “time-limited planning route” allowing private developers to fast-track applications without completing late-stage financial viability assessments, provided they commit to a minimum of 20 per cent affordable housing on-site.

This marks a sharp decline from the long-standing 35 per cent threshold established under the standard London Plan.

A total of seven local authorities have united to oppose the change. The independent-led administration of Tower Hamlets is spearheading the litigation alongside the Green Party-led town halls of Hackney and Lewisham. Additionally, the local authorities of Lambeth, Southwark, Waltham Forest, and Haringey have confirmed they are supporting the legal challenge.

The claimant boroughs assert that lowering the baseline requirement will incentivise property developers to delay current planning applications or renegotiate existing agreements down to the lower 20 per cent metric, permanently depriving low-income Londoners of social homes.

What are Local Leaders Saying About the Quota Reduction?

Municipal leaders have expressed deep concern over how the policy modification will alter the demographic and economic landscape of local communities.

As documented in official statements from the cross-borough legal campaign, Lutfur Rahman, the Executive Mayor of Tower Hamlets, directly condemned the policy shift:

“It is a scandal to cut the affordable housing quota when the need for genuinely affordable homes has never been greater. Our city is increasingly being turned into an investment asset for the super rich rather than a place where ordinary Londoners can afford to live, work and raise a family.”

Mayor Rahman further challenged the underlying economic rationale presented by the Greater London Authority, stating:

“City Hall claims this policy will incentivise developers to build homes more quickly. But homes for whom? If ordinary Londoners can’t afford them, they will simply sit empty. Far from accelerating housebuilding, the policy is already slowing it down, with some developers delaying schemes until the quota is cut to 20%.”

How does City Hall Defend the Emergency Planning Policies?

In response to growing opposition from local authorities, the Greater London Authority and the central government have defended the 20 per cent fast-track policy as a necessary response to an unprecedented economic downturn within the construction sector.

According to joint statements released by Housing Secretary Steve Reed and the Mayor of London via the Gov.uk communications portal, housebuilding in the capital faces a “perfect storm” of adverse economic pressures, including post-pandemic supply chain issues, high interest rates, inflationary construction costs, and regulatory backlogs.

Data compiled by the MHCLG revealed that social and affordable housing starts on site in London collapsed to just 4,522 units in the recent reporting period, representing a sharp contraction from the 26,386 starts recorded in the 2022/23 fiscal year.

Defending the intervention, Sadiq Khan stated:

“Building more social and affordable homes is a top priority and I’m taking the tough decisions to get these much-needed homes built, including working closely with government to finalise this temporary emergency package which will unlock stalled sites across London.”

The Mayor added that City Hall had listened to feedback from multiple sectors and designed the temporary parameters to ensure that developer confidence could return to the market, stating that he made

“no apology for wanting to see more action to deliver new homes.”

Similarly, Housing Secretary Steve Reed emphasised that the primary objective is to turn stagnant “plans on paper into thousands of new homes,” suggesting that a lower, viable target would generate a higher net volume of completions than a higher, unachievable target. Proponents of the strategy frequently reference the development principle that

“20 per cent of something is better than 35 per cent of nothing.”

Background of the Housing Target Development

The origins of this legal conflict trace back to the implementation of the current London Plan, which established a “Viability Tested Route” and a “Fast Track Route” for housing developments.

Under standard policy rules, developers who offered at least 35 per cent affordable housing on private land (or 50 per cent on public and industrial land) could bypass lengthy, public financial negotiations.

However, escalating material prices and macroeconomic shifts over the last few years meant private developers increasingly claimed that the 35 per cent threshold rendered major urban schemes entirely unviable. This caused dozens of major brownfield projects across London to stall completely.

To counteract the sudden drop in active construction sites, the Ministry of Housing, Communities and Local Government cooperated with City Hall to formulate the Homes for London emergency package.

Launched as a temporary intervention set to run until March 2028—or until a brand-new, comprehensive London Plan is formally adopted—the package slashes the fast-track eligibility floor to 20 per cent.

To further incentivise property firms, the measures include a 50 per cent reduction in the Community Infrastructure Levy (CIL) paid to local councils, a £324 million “City Hall Developer Investment Fund” to kickstart stalled projects, and expanded “call-in” powers allowing the Mayor to directly take over planning decisions on developments of 50 homes or more if local boroughs are minded to refuse them.

Prediction: How This Development Can Affect London Residents

If the High Court rejects the judicial review and allows the Mayor’s emergency policy to stand, it will likely have distinct, profound consequences for ordinary London residents, particularly low-to-middle-income households currently seeking secure housing.

In the short term, the reduction in the fast-track threshold to 20 per cent, coupled with infrastructure levy breaks, is predicted to restore developer confidence. Private housebuilders are likely to resume construction on stalled, multi-phase brownfield sites.

This will increase the absolute volume of housing units arriving onto the market, potentially easing broader rental pressures within the private sector.

Long-Term Deficit in Genuinely Affordable Social Rent

Conversely, for the estimated tens of thousands of families currently residing in temporary accommodation or on council waiting lists across boroughs like Tower Hamlets, Southwark, and Hackney, the policy shift poses a severe risk. Because the fast-track baseline is being cut by 15 percentage points, new large-scale residential towers will allocate significantly fewer units to social rent or subsidised tenures.

Squeezed Council Budgets for Local Infrastructure

Furthermore, because the emergency measures grant developers a 50 per cent relief on the Community Infrastructure Levy, the local authorities backing this lawsuit will experience a substantial decline in developer-funded revenue.

London residents can therefore expect increased strain on local public services, as councils find themselves with fewer funds to build or expand GP surgeries, public parks, transport links, and youth facilities to support newly constructed, high-density residential blocks.