The recommendation is among 10 ideas outlined in the annual State of the Capital report. The paper includes calls for a new shared ownership product, mandatory early involvement for registered providers on section 106 homes design and a call for joint action on social housing allocations
Greater devolution of funding could unlock billions of pounds for investment in housing, according to a new report by Building’s sister title Housing Today and the G15 group of housing associations published today.
The latest report in the State of the Capital series, titled Fixing London’s Fragmented Housing System, makes 10 recommendations to help rejuvenate the London market and get affordable housing delivery back on track.
The report calls for the mayor of London and boroughs to be given “genuine fiscal devolution” - moving beyond programme-by-programme control to “a system where London can determine how funding is deployed to meet local priorities”.
Housing Today and G15 call for a multi-year, single integrated settlement for housing, infrastructure and regeneration, agreed with central government but devolved in delivery. This would allow the GLA and boroughs to align investment across programmes, plan over the long term and target funding where it has the greatest impact.
The report calls for the devolution of revenue-raising powers with London being able to retain a share of property tax revenues ring-fenced for affordable housing delivery.
It says: “Done properly, greater fiscal devolution could unlock billions more in investment over the long term, supporting higher levels of housebuilding, reducing homelessness and underpinning the capital’s continued economic success.”
The recommendation is just one of 10 ideas outlined in the report.
It calls on the government to commission a comprehensive review of all regulations and policies in London to look at “whether the volume and scope of the many restrictions and requirements associated with development, asset management and retrofit are unnecessarily constraining delivery and growth”.
The measures set out in this report are practical and achievable. Taken together, they would give London the flexibility, tools and capacity needed to increase affordable housing supply, improve outcomes for residents and support economic growth
It says ministers should look at the feasibility of introducing a single outcome-based regulatory framework and in the meantime implement the Decent Homes Standard (DHS) and Minimum Energy Efficiency Standard (MEES) requirements on a single, aligned timeline in 2037.
Fixing London’s Fragmented Housing System backs a call for a new shared ownership staircasing model under which shared owners are subsidised to staircase to 100% so that the mortgage payment is comparable to their current overall mortgage and rent costs.
This could be achieved by allowing housing associations to use a portion of Recycled Capital Grant Funding (RCGF). It calls for the shared ownership income cap to be reviewed and updated.
The report also makes recommendations about index-linking grant, mandating early housing association involvement at the design stage on section 106 properties and flexible use of RCGF. It calls for national, regional and local government to join with the sector to reform and renew the social housing allocations system.
It says: “The measures set out in this report are practical and achievable. Taken together, they would give London the flexibility, tools and capacity needed to increase affordable housing supply, improve outcomes for residents and support economic growth”
The report was informed by a behind-closed-doors roundtable, featuring G15 leaders, along with local authority, housebuilder and third sector representatives, at the Building the Future Conference in London last October. The leaders will meet again at this year’s conference on 7 October in the City of London.
This report is the second in the State of the Capital series. The first, in March 2025, called for a new low-cost loan model that was subsequently adopted by government.
Housing Today and the G15’s State of the Capital 2026 report
There’s strong recognition by G15 chief executives that the Starmer government has backed the affordable housing sector, but it’s clear that London faces unique pressures and challenges that dampen the outlook for affordable housing development in the capital.
The past 12 months have been a rocky time for London housing delivery, with starts stagnating and schemes on hold due to viability issues and building safety delays.
The government has responded by bringing forward time-limited measures to get delivery in London moving. But in the here and now, with costs still rising, competing investment demands and a fragmented system under pressure, delivery in the capital continues to pose major challenges. London fell short of its annual housing target by around 58,000 homes last year.
This second State of the Capital report, produced by Housing Today in partnership with the G15, looks at several ideas that could be adopted to help rejuvenate the London market and get affordable housing delivery back on track.
It was informed by a meeting of G15 leaders, along with council and third sector representatives at the Building the Future conference in Westminster last October. The report is written by Carl Brown of Housing Today, in collaboration with the G15.
Downloads
G15 HT State of the Capital 2026
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