BLOGS

A target that changes the planning conversation

London's new annualised housing need figure of 87,992 homes is more than double the roughly 42,000 homes actually delivered across the capital in a typical recent year. Combined with a revised National Planning Policy Framework (NPPF) that reinstates mandatory, higher local housing targets and reduces the scope for boroughs to argue their way out of them, the target shifts planning from a negotiable ambition to something closer to a statutory floor.

The £39bn Affordable Homes Programme running through the rest of the decade adds a funding layer to that pressure. It signals that government wants delivery, not just permissions, and gives boroughs and housing associations a war chest to unlock stalled sites. For developers and investors, the practical question is not whether targets rise, but which boroughs will actually convert that pressure into deliverable pipeline, and which will get stuck in appeals and refusals.

Where the pipeline is already concentrating

REalyse planning application data across London boroughs over the past three years shows delivery is highly uneven. A small number of boroughs account for a disproportionate share of proposed units: Ealing, Tower Hamlets and Wandsworth alone have generated well over 30,000 proposed homes between them, while boroughs such as Bromley and Waltham Forest sit closer to 2,500–2,700 proposed units over the same period, despite broadly comparable populations.

Refusal rates tell a related story. In Croydon, refused applications have outpaced granted ones in the same window, while boroughs such as Wandsworth and Kensington and Chelsea show refusal rates well below 20% of total applications. For investors underwriting sites on a risk-adjusted basis, this borough-level variance in approval likelihood is arguably as important as raw land value: a scheme with identical fundamentals can face very different odds of consent depending on which side of a borough boundary it sits.

The build-to-rent (BTR) share of applications remains modest across almost every borough, generally under 1-2% of total planning volume, even as institutional capital continues to target the sector. That gap between policy appetite for BTR as a delivery vehicle and its actual planning footprint suggests boroughs still have significant headroom to fast-track BTR consents if they want to hit unit targets without relying solely on traditional for-sale schemes.

What this means for site selection

For development managers, the borough-level data points to a practical filter: prioritise boroughs with both high historical grant rates and large outstanding unit targets, since these combine consenting confidence with genuine housing need. Boroughs with high refusal rates but ambitious targets, Croydon and Barnet stand out in the current data, may still offer opportunity, but should be underwritten with longer planning timelines and higher abort-cost contingencies built into appraisals.

Viability, land values and the affordability squeeze

The NPPF's tilted balance in favour of housing delivery is designed to make it harder for boroughs to reject schemes on marginal viability grounds. In practice, this pushes more of the affordability conversation into Section 106 negotiations and viability assessments at the point of planning, rather than at appeal. Developers should expect more scrutiny of build cost assumptions and land residuals, particularly in boroughs racing to close large gaps between target and delivery.

On the sales side, REalyse transaction data shows London's average sold price per square foot sitting broadly in the £600–£660 range across flats, terraced, semi-detached and detached stock over the past 12 months, with flats and terraced housing trading at the top of that range given transaction volume concentrated in inner and mid-London boroughs. Any material increase in supply from a higher target, if actually delivered, would test the resilience of these price points in boroughs where completions accelerate fastest, an important input for lenders sizing loan-to-GDV ratios on schemes exchanging or completing over the next three to five years.

For lenders and credit analysts, the combination of a firmer planning framework and a large affordable homes funding pot changes the risk profile of consented land in high-target boroughs. Sites with resolution to grant in boroughs showing strong historical delivery may command a lower execution-risk premium than equivalent sites in boroughs with a history of refusals and appeals, even before construction costs are considered.

Community and infrastructure friction points

Higher mandatory targets do not remove local opposition; they concentrate it. Boroughs facing the steepest gap between current delivery and their new annualised requirement are likely to see more contentious major applications, particularly where proposed density increases collide with existing infrastructure capacity for schools, transport and healthcare. Local communities and ward councillors retain a voice in the process even under a tilted NPPF, and appeals activity is a reasonable leading indicator of where friction will be highest.

For investors and developers, tracking planning committee decision patterns and appeal outcomes by borough, alongside REalyse-style comparables on nearby completed schemes' pricing and absorption rates, offers an evidence base to support pre-application engagement and viability discussions, rather than relying on borough-wide averages that can mask significant ward-level variation.

Outlook

The 87,992-home target and its supporting £39bn funding programme mark a genuine shift in how London's housing delivery will be planned and financed, but the borough-level data makes clear that the practical effects will be far from uniform. Boroughs with efficient consenting track records and available sites are best placed to absorb the new pressure; others will need either policy support or land assembly interventions to close the gap.

For developers, investors and lenders, the opportunity lies in reading this borough-by-borough variation early, using granular planning and market data to identify where target pressure is most likely to translate into deliverable, financeable pipeline over the next planning cycle.