The Mayor of London, Sadiq Khan, will make a crucial decision on the future of a multi-billion pound regeneration scheme after a developer proposed slashing its affordable housing commitment from 35 per cent to a potential low of just 3 per cent.
Mayor Khan steps in after council delays
Mr Khan has called in a key planning application for the vast Canada Water Masterplan in Southwark, south-east London. This move came after Southwark Council missed its decision deadline twice, first in April 2025 and again in November 2025.
The developer, British Land, submitted a Section 73 application in January 2025 seeking major changes to the original plan approved in May 2020. The council's failure to rule on these amendments prompted the developer's planning agent, DP9, to write to the Mayor on 27 November, warning that further delays would impact the scheme's benefits.
Why is the developer cutting affordable homes?
British Land argues that soaring construction costs and new building safety regulations, specifically the requirement for a second staircase in buildings over 18 metres, have severely challenged the project's financial viability.
The initial Section 73 application proposed reducing affordable housing to 10 per cent while increasing the total number of homes to around 3,000. However, a subsequent financial assessment submitted to City Hall concluded that only 3 per cent affordable housing is currently viable without public subsidy in later phases.
A Greater London Authority report from 1 December noted the applicant's claim that the consented scheme "cannot secure further investment and delivery cannot be progressed" under current financial conditions.
'A slap in the face' for the community
The proposed changes have sparked significant local opposition, attracting over 1,100 objections on the council's planning portal. Critics argue the Section 73 process is being used to make "sweeping revisions" to the original masterplan.
Southwark's Liberal Democrat opposition councillors have strongly condemned the move. Deputy Group Leader, Councillor Rachel Bentley, called the revised proposals "a slap in the face for local people" and criticised the Labour-run council for its inaction.
"In the midst of a housing emergency, it beggars belief that Southwark Labour have allowed yet another huge scheme slash its affordable housing provision," Cllr Bentley stated. "We’re now supposed to accept an insulting number of homes that local people can actually afford."
Council and Mayor's response
Southwark Council's Cabinet Member for New Homes, Councillor Helen Dennis, said the proposed reduction was "unacceptable" but stressed nothing had been agreed. She defended the council's record, stating it built more social rent homes last year than three Lib Dem-run London councils managed in a decade combined.
In his response to DP9 on 1 December, Mayor Sadiq Khan acknowledged Southwark's recent significant delivery of homes but emphasised that the Canada Water development would still contribute substantially to London's overall housing need.
The original 2020 permission included plans for 2,815 homes, with 35 per cent affordable, plus 4.7 million square feet of retail, office, and leisure space. The entire development has a 10 to 15-year timeline, with completion possible as late as 2036.
