Several London boroughs, including Hackney, have launched a legal challenge against Mayor of London Sir Sadiq Khan over controversial changes to the capital’s affordable housing requirements, escalating a growing dispute over how best to tackle London’s housing crisis.
Hackney Council has joined forces with Tower Hamlets and Lewisham in seeking a judicial review of a decision made by City Hall in October 2025 to reduce the affordable housing threshold for certain developments from 35 per cent to 20 per cent. Borough leaders argue that the move could significantly reduce the number of affordable homes built across London at a time when housing demand remains at record levels.
The legal challenge focuses on the Mayor’s temporary planning changes, which were introduced to encourage developers to move forward with projects that had become financially difficult due to rising construction costs, inflation, labour shortages and higher borrowing rates. Under the revised policy, developments providing at least 20 per cent affordable housing can benefit from a faster planning process and other incentives designed to unlock stalled schemes.
Supporters of the policy argue that London’s housing market has slowed dramatically in recent years and that reducing affordability requirements could help restart projects that might otherwise remain unbuilt. City Hall has maintained that delivering some affordable housing through viable developments is preferable to seeing projects abandoned altogether.
However, opponents say the decision risks undermining long-term efforts to address London’s shortage of genuinely affordable homes. Councils involved in the legal action contend that lowering the target weakens their ability to negotiate affordable housing contributions from developers and could result in fewer homes being available to lower-income residents.
The dispute comes against the backdrop of London’s continuing housing challenges. Recent figures have shown that affordable housing delivery in the capital remains well below expectations, with the Mayor already facing criticism over progress toward previously established affordable housing targets. Government adjusted targets for affordable housing starts have been reduced in recent years amid difficult market conditions, yet concerns remain about whether enough homes are being delivered to meet demand.
Southwark Council has also publicly backed the challenge, warning that lowering affordable housing requirements could have long-term consequences for thousands of families currently waiting for suitable accommodation. Local authorities across London continue to face increasing pressure from growing housing waiting lists and rising temporary accommodation costs.
For Hackney, one of London’s most densely populated boroughs, affordable housing remains a critical issue. The borough has experienced significant development over the past decade, but rising property prices and rental costs have made it increasingly difficult for many residents to find affordable places to live.
The judicial review process will now determine whether the Mayor’s decision followed the correct legal procedures and whether sufficient consultation took place before the policy change was implemented. If successful, the challenge could force City Hall to reconsider or revise its approach to affordable housing targets.
As London’s housing crisis continues to dominate political debate, the outcome of the case could have significant implications for future development projects and the delivery of affordable homes across the capital.
