London is the most expensive city in Europe in which to rent a home, and one of the hardest in which to buy one. So it is genuinely staggering that, in 2025-26, only 4,170 new homes started construction in the capital — a 72% collapse on the previous year, and according to the Centre for Policy Studies the worst housebuilding performance since 1945.

Read that again. Worst since the Second World War. After fifteen years of supposedly building too little, Labour took office, gave London a Labour Mayor a third term, and managed to deliver fewer homes than at any point since the country was rebuilding from the Blitz.

Two Labour Governments, One Failure

Sadiq Khan has been Mayor of London since 2016. He campaigned on housing. He set targets. He fought planning reform from City Hall. He was given primary planning powers, a substantial GLA budget, and the cooperation of a Labour government in Westminster from July 2024 onwards. The result is the lowest housebuilding numbers in modern London history. This is not a story of obstruction. This is a story of the Labour Party being given the keys and crashing the car.

London's pipeline has dried up for specific, identifiable reasons. Building Safety Levy costs have made many mid-rise schemes unviable. Khan's affordable housing percentages, applied without flexibility, have killed marginal schemes outright. Mortgage rates pushed up by Labour's inflation problem have wiped out demand at exactly the moment supply is collapsing. And the Renters' Rights Act has driven private landlords out of the market faster than any new homes can be built.

What This Means in Practice

If you are a young teacher, a young nurse, a young police officer, or any other key worker on a London-relevant salary, here is what 4,170 starts means. It means your housing options will get worse, not better, every single year of this Parliament. It means rents will keep rising. It means the chance of getting on the property ladder is moving further out of reach. It means London is hollowing out, with the people who actually run the city being priced into the commute or out of the labour market.

The Mayor's office is now spinning that this is a developer problem. It is not. Developers want to build. Sites have planning consent. The reason they are not breaking ground is that the cost stack imposed by central and London government is bigger than the financing models can absorb. When you load a scheme with a Building Safety Levy, an affordable percentage, a carbon obligation, a section 106 contribution and a community infrastructure levy — and then your buyers can't get mortgages — there is no scheme. The plot sits empty.

The Wider National Picture

London is the worst case, but it is not unique. Across England the broader pledge to build 1.5 million homes over this Parliament is on track to deliver well below half. Year-one starts hit just 39% of the annual target. The country needed roughly 300,000 a year. We delivered 140,860 completions and 115,770 starts. This is not a stumble. This is the worst housebuilding performance of any modern peacetime government inside its first eighteen months in office.

Meanwhile the Labour government continues to import roughly 700,000 net migrants a year — a population the size of Sheffield, every single year. You cannot build under half the homes the country needs and add a Sheffield to the population at the same time and expect anything other than what we are now seeing. Rents go up. House prices stay stubbornly high. Young families give up.

What Reform UK Would Do

Reform UK would scrap the Building Safety Levy in its current form, return planning sovereignty to local communities with proper green belt protection, and impose strict numerical caps on net migration so that demand stops outrunning supply. We would publish a transparent annual housing audit by region, so voters can see whether councils and Mayors are doing the work or hiding behind targets. And we would tell the truth about the Renters' Rights Act: it has not protected renters, it has driven their landlords out of the market and left them with fewer choices and higher rents.

London used to build itself out of crises. Today it cannot build itself out of a recession in housebuilding. The capital deserves a serious plan. Labour has not delivered one — at City Hall or in Westminster — and the figures from 2025-26 are the indictment.