A system under strain
Local governments across England are being asked to deliver levels of affordable housing that the current system is simply not configured to produce. Despite sustained effort through planning policy, partnership with Registered Social Landlords and the use of Section 106, the gap between need and delivery persists.
This is not primarily a failure of execution, it’s a consequence of how the housing system itself is structured. At present, affordable housing is rarely planned as a primary outcome, mostly determined through a process driven by land value and private market delivery. Resulting in dependency on private housing viability, often reduced in quantum through negotiation, and ultimately does not provide the scale required to meet demand. For organisations such as Gleeds, working with public sector bodies, developers, funders and delivery partners, the issue is increasingly clear: affordable housing delivery needs to be considered strategically earlier, as part of a planned system rather than a residual output.
The residual problem
The dominant delivery mechanism, Section 106 ties affordable housing to private residential schemes and implications are significant. Affordable housing does not shape development; it is shaped by it. Where schemes are viable, some provision is made. Where margins tighten, affordable housing is reduced. Where schemes do not proceed, nothing is delivered.
Viability appraisal under the planning process reinforces this dynamic. Rather than testing whether land can support policy requirements, it frequently serves to align those requirements with land prices that have already been bid up in anticipation of future value. Over time, this normalises a gap between policy ambition and actual delivery. In effect, affordable housing becomes a residual outcome of land speculation for private housebuilding.
Why the system cannot self-correct
It is often assumed that alternative delivery partners, particularly Registered Social Landlords, might compensate for this shortfall. In practice, they operate within very similar constraints. They access land at market prices, rely on complex funding structures, whilst managing financial risk within tight parameters.
Their capacity to scale independently of the market is therefore limited. They are participants in the system, not drivers of it. The underlying issue is more fundamental: there is no independent pipeline of land for affordable housing. Supply is contingent on the timing and viability of private development, therefore subject to the same cycles and constraints.
Land and value
At the heart of the problem lies the relationship between land and value. In England’s current model, land value is largely determined by expectations of future market housing. Policy requirements, including affordable housing, are then fitted around this value through negotiation. If this dynamic is to change, the issue needs to be addressed at source.
There remains a clear and continuing need for planning reform that moves toward a more zonal, strategic approach to housing. By establishing clearer, plan-led allocations of land with defined development parameters, including tenure expectations, authorities can begin to shift value formation. In such a system, land values adjust to policy, rather than policy adjusting to land values. This is not a complete solution in itself, but it is a necessary condition for reducing speculative land value capture and creating a more stable foundation for delivery.
A different approach
Alongside this, a more proactive delivery model needs to evolve. One that allows local governments to shape outcomes directly rather than relying solely on negotiation with the private market. For maximum impact, this needs to begin with a more active role in land assembly, particularly in the context of regeneration and previously developed sites, where authorities often have greater influence and where market delivery is more challenging. These sites, while complex, present an opportunity to reset the relationship between value and development.
By bringing land forward in a coordinated way, with clear parameters for tenure and design established early, authorities can create the conditions for delivery that align with policy objectives from the outset. Yet land control alone is not sufficient. The second critical ingredient is time. In contrast to models reliant on short-term returns and market sales, capital is structured around stable income over extended periods. Housing, in this context, is treated as an asset, with rental income providing the basis for investment returns, reducing pressure to maximise upfront land value while allowing development to proceed independently of market cycles. It also supports a broader range of tenures, including intermediate and cost-based rents that are often difficult to deliver within the current system.
The role of local government
Encouragingly, many local governments are already beginning to move in this direction. Through the establishment of their own development companies, participation in joint ventures and a more active approach to land and regeneration, councils are stepping beyond a purely regulatory role. What is emerging is a shift toward an enabling function, one in which authorities act as stewards of land and partners to long-term capital, rather than simply arbiters of planning applications. Within this model, delivery becomes more deliberate, sites are brought forward with clear vision and a range of partners are engaged to build out schemes in a coordinated way. Affordable housing is no longer a negotiated outcome at the margins, but an integral component of the development strategy.
Toward a parallel delivery system
Any change in approach cannot realistically replace the existing market-led system, which will continue to play a central role in housing delivery. Rather, a parallel approach needs to emerge, one that is less exposed to market volatility and more directly aligned with public objectives. Such a system would establish a pipeline of land for affordable and mixed-tenure housing, using long-term capital to fund and retain assets. Housing delivery would be driven by identified need rather than residual viability, with value recycled over time to support continued investment. In doing so, it would provide a more stable and scalable foundation for affordable housing delivery, complementing rather than competing with private development.
Elements of this approach exist in the Vienna social housing concept, which is a long-term, city-led housing model where affordable housing is treated as core public infrastructure, not just a welfare safety net. In practice, Vienna uses strong public involvement in land, funding and regulation to create a large stock of affordable rental homes. These include municipally owned housing and subsidised limited-profit housing, with rents kept below market levels and access available to a broad section of the population, not only the lowest income households.
The shift
The current model asks too much of mechanisms that were never designed to deliver housing at the scale now required. As long as affordable housing remains dependent on speculative land markets and subject to viability negotiation, it will continue to fall short. A more effective approach lies in intervening earlier in the process - in how land is brought forward, how value is set, and how development is financed over time. Through a combination of planning reform, proactive land assembly, particularly on regeneration sites, and the mobilisation of patient capital, local government have the opportunity to reshape the system from within. In doing so, they can move from managing constrained outcomes to enabling sustained, policy-led delivery.
The shift is already beginning. A more active role for Governments is being endorsed .The challenge now is to scale it.
