Berkeley chairman Tony Pidgley said Livingstone’s proposed planning requirement would make the London market unprofitable for developers.
Pidgley told Building: “By and large, housebuilders are doing a good job, but they can’t keep asking us to fund everything. That 50% social housing has to be paid for and it will stifle development.
“Brownfield is the right way forward and it has to be the large companies that bring schemes forward. But developers are not going to take work on unviable sites.”
Pidgley added that house prices in London might have to rise to compensate the industry for the additional costs of providing more social housing.
He said section 106 planning gain agreements were already making development too expensive, and Livingstone’s diktat could be the final straw.
He said: “On most London brownfield sites, the land price costs less than 10% of a scheme’s market value. The big cost is the add-ons.”
Alfred McAlpine Homes London managing director Nick Stonley backed up Pidgley’s remarks.
He said: “It is all very well making broad-brush statements, but we need to look at every development on an individual basis.
“An area may not need social housing, but will need environmental or transport services. We cannot afford to do everything.”
Pidgley added that the progress made by the housebuilding industry in terms of design and quality would be stopped if too many pressures were put on firms.
“This industry cannot be treated like a production line. It will be a tragedy if the regeneration triggered by brownfield sites is not allowed to continue,” he said.
His remarks came as the House Builders’ Federation said the planning process would face further delays after planning minister Nick Raynsford announced last week that greenfield developments of more than 150 homes would be referred to the DETR in future.
A HBF spokesperson said: “This decision will achieve nothing other than to further increase expense and delay in the already diabolical planning process.”