Housing secretary Màiri McAllan

In a letter to UK housing secretary Steve Reed OBE, Ms McAllan said she was “deeply concerned” that Westminster was “considering deprioritising affordable housing at a time when there is increasing pressure on the housing system across the UK”.

She warned that any reduction in ambition would undermine Scotland’s own progress on affordable homes, stating: “You will be aware that I recently published a Housing Emergency Action Plan which reinforced the importance of a long term approach to forward investment in affordable homes and the Scottish Government remains committed to delivering 110,000 affordable homes by 2032, recognising the critical role that housing plays in helping to eradicate child poverty as well as promote positive environments for the people of Scotland to live and thrive.”

Ms McAllan urged Mr Reed to reaffirm the UK Government’s commitment to affordable housing ahead of the upcoming Budget, adding that she looked forward to his “reassurance that housing and, in particular affordable housing, remains a top priority.”

Her intervention came after Mr Reed and London Mayor Sir Sadiq Khan jointly announced that affordable housing quotas for new developments in the capital would be cut from 35% to 20% in an effort to revive the city’s struggling construction sector.

The pair unveiled the policy in a joint interview with Sky News, describing it as a “temporary emergency measure” to boost stalled housing projects and encourage developers back into the market.

Mr Reed justified the U-turn, saying: “Thirty-five per cent of nothing is nothing. We need to make schemes viable for developers so they’ll get spades in the ground and start to build.”

The change represents a major shift for Sir Sadiq Khan, who has long championed ambitious affordable housing requirements as central to his mayoral campaigns. But he insisted the new approach was necessary given what he called “the most difficult period for housebuilding since the global financial crash”.

Both the Mayor and the UK Government described the capital’s housing sector as being hit by a “perfect storm” of spiralling construction costs, high interest rates, supply chain disruption and the lingering effects of Brexit and the pandemic.

Only 3,991 affordable homes were completed in London last year, down from more than 25,000 the year before, while new private housing starts have collapsed to just 3,200 in the first nine months of this year, far short of the 66,000 target.

To jump-start development, the government and City Hall announced a £322 million Developer Investment Fund to help with site clearance and unlock stalled projects, alongside new powers for the mayor to intervene in planning applications involving more than 50 homes.

Sir Sadiq blamed Brexit for compounding labour shortages and driving up material costs, while critics within the industry said his own affordable housing targets had made many schemes financially unviable.