BLOGS

A new planning arithmetic for London

London's housing need has been reset. Under the revised National Planning Policy Framework (NPPF) and its updated Standard Method, the capital's annual housing requirement now stands at 87,992 net additional homes a year, down from an initial proposal of 98,822 but still well above the outgoing London Plan target of 52,000.

For context, London has not come close to delivering at this scale in recent years. That gap between requirement and delivery is now the central fact shaping borough-level planning decisions, five-year land supply calculations, and the Mayor's ongoing review of the London Plan, due to be adopted in 2027.

The scale of the number matters because the Standard Method isn't just an aspiration. It feeds directly into whether a local authority can demonstrate a five-year housing land supply, a test the revised NPPF has reinstated as mandatory. Boroughs that fall short face a weaker hand in resisting speculative applications, which in turn changes the calculus for developers screening sites.

Money follows the mandate: the £39bn Social and Affordable Homes Programme

Government has paired the higher target with sustained funding. The £39bn Social and Affordable Homes Programme (SAHP), running 2026 to 2036, allocates up to £11.7bn to London via the Greater London Authority, with the remainder distributed by Homes England and, increasingly, regional mayors across England. At least 60% of the funding nationally is earmarked for social rent.

This is a materially longer funding horizon than the previous five-year, £12.3bn Affordable Homes Programme (2021-26), which averaged roughly £2.3bn a year. The 10-year window is designed to give registered providers, councils and strategic partners the confidence to plan pipelines rather than chase annual funding cycles.

For planning teams and investors tracking delivery, this shifts the question from "will funding exist" to "which schemes will be prioritised." REalyse's planning pipeline data lets users track applications by status, unit count and tenure mix at borough level, which is increasingly the lens through which SAHP bids and section 106 negotiations will be judged. Boroughs able to show a credible pipeline of deliverable, permission-ready sites are best placed to draw down funding and hit their allocated share of the 87,992 target.

Brownfield first, but the green belt question won't go away

The NPPF's stated preference is brownfield-first development, and London does hold a substantial stock of brownfield land, much of it in outer boroughs and regeneration corridors. But the London Assembly has already flagged that brownfield capacity alone is unlikely to meet the full 87,992 figure, with the Greater London Authority itself acknowledging that green belt release "appears unavoidable" under the new policy framework.

This is where the NPPF's most consequential structural change comes in: the introduction of "grey belt" land, defined as green belt land that does not strongly contribute to green belt purposes. Where a local authority cannot demonstrate a five-year land supply, grey belt sites become eligible for release, subject to conditions including a 15% uplift in affordable housing above existing policy levels (capped at 50%) for any scheme on released green or grey belt land.

In practice, this creates a new category of investable opportunity, and a new category of due diligence. Sites on the green belt fringe that were previously written off can now warrant a second look, but only where the grey belt test is met and affordable housing viability stacks up. This is precisely the kind of screening where combining land parcel classification (green belt and brownfield flags) with local planning pipeline status becomes valuable: identifying which authorities are under five-year supply pressure, and therefore where grey belt release is a live possibility, versus areas where existing brownfield allocations still have headroom.

Borough-level delivery: an uneven starting point

Not every London borough carries the same weight in the 87,992 figure. Housing need under the Standard Method is distributed unevenly, reflecting existing housing stock, affordability pressures and past delivery. Some outer boroughs with more available land have seen their individual targets rise sharply relative to previous London Plan allocations, while some inner boroughs face targets that are difficult to reconcile with limited developable land and heritage or conservation constraints.

Cross-referencing borough-level targets against REalyse's planning pipeline data (applications in progress, granted, refused or withdrawn, together with average time to decision) gives a clearer picture of which boroughs are structurally positioned to deliver and which face persistent shortfalls. Notably, the London Assembly's own cross-party analysis has pointed out that roughly 286,000 homes with existing planning permission across the capital remain unbuilt, a reminder that consent volume and delivery volume are not the same thing, and that market conditions, build cost inflation and viability remain as important as planning policy itself.

Outlook

The 87,992 figure will dominate London planning committee agendas and borough local plan reviews well before the revised London Plan lands in 2027. Expect more grey belt applications testing the new criteria, sharper scrutiny of five-year land supply positions, and SAHP bidding rounds that reward boroughs and registered providers with deliverable, planning-ready pipelines over ambition alone.

For developers, lenders and housing associations, the practical task is less about debating the target and more about identifying where policy, land availability and funding genuinely align. That means tracking planning pipeline momentum and land classification together, borough by borough, rather than treating the 87,992 figure as a single national story.