The need for affordable housing in London has never been more urgent. With rising housing targets and bold regeneration ambitions, the capital continues to set a high bar for delivery. But for many Registered Providers (RPs), the path from policy to reality has become increasingly difficult to navigate.

Caught between rising expectations and tightening financial constraints, RPs are operating in an environment of mounting risk and complexity. While some local authorities are increasing demands, others quietly acknowledge that affordable delivery has stalled. The result? A landscape defined by pressure, inconsistency and frustration.

Policy vs. reality

Government and GLA rhetoric continues to focus on growth: more homes, faster, and more affordable. Yet for those working on the ground, this vision frequently collides with hard financial realities.

Many RPs are contending with worsened financial metrics compared to pre-Covid levels: higher long-term borrowing rates, shorter cashflow profiles, and tougher discount rates. This directly reduces the price they can offer for new homes – increasing the financial gap that affordable units contribute to mixed-tenure schemes.

As construction costs remain high and concern over build quality persists, RPs are becoming more selective. The recently published G15 Section 106 checklist reflects this shift: a clearer, more business-focused approach to acquisition, centred on risk and deliverability.

The GLA has announced that it has secured £11.7bn of the proposed £39bn included in the next Affordable Housing Programme (AHP). Whilst this looks like a big number, it represents just 30% of the total pot, down from 33% secured under the last AHP. London’s challenges of density and high existing use values are significant compared to the rest of England and yet it continues to lose out in central government support. Is the Mayor doing enough?

Early engagement – still not early enough

A common theme is the need for earlier RP involvement, well before planning. Yet in many cases, engagement happens too late – once design is fixed and viability gaps are embedded. This delay limits flexibility and adds cost, especially on constrained or complex sites.

The Estate Regeneration challenge

Once heralded as the ideal model for large-scale brownfield delivery, estate regeneration schemes have become some of the hardest projects to progress.

While Zone 1 sites still benefit from high land values, outer borough schemes struggle to stack up. The cost of vacant possession, demolition and re-provision of social homes often outweighs the value generated – particularly when compared to greenfield or greyfield sites that can deliver 50% affordable homes with less upfront cost.

From a central government perspective, brownfield estate renewal now appears less financially efficient. Early signals from the new AHP suggest the government is deprioritising Estate Regeneration as a result – yet these are often the communities most in need of public investment.

A shifting power dynamic

Amid this complexity, delivery partners are watching the GLA’s evolving role with interest. The City Developer model, intended to reinvigorate public-led housing delivery, has progressed slowly. In contrast, Homes England has taken a more active and flexible stance – including recent investment in London, such as the £12m grant to upgrade Pontoon Dock DLR station in partnership with the GLA and TfL.

This intervention hints at a growing influence and capacity within Homes England to support delivery in ways the GLA may struggle to match.

#OurSteer

With a new 10-year rent settlement and additional grant funding promised, there is hope for rebalancing the system. But vision alone won’t deliver homes. Success depends on aligning policy, funding, and commercial reality – and building genuine, early partnerships with the RPs expected to deliver.

At Newsteer, we continue to work with RPs, developers and local authorities to bridge that gap – ensuring ambition is grounded in deliverability.

To discuss your affordable housing strategy, get in touch with our team:

Geena Bains (viability & valuation): geena.bains@newsteer.co.uk

Paul Manning (planning): paul.manning@newsteer.co.uk

Jonny Stevenson (land & new business): jonny.stevenson@newsteer.co.uk