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Data Centres: ‘in or out’ as Nationally Significant Infrastructure?

Data Centres: ‘in or out’ as Nationally Significant Infrastructure?

Nancy Stuart 24 Jul 2026
There is much fanfare around Government changes to the Nationally Significant Infrastructure Projects (NSIP) consenting process, the latest update to which is a new suite of guidance published on the 3rd July 2026, that comes into force this week - 24 July. The ambition of the changes is to cut through the procedural burden on applicants to make the process more attractive to use. In outline, changes involve redesigning the pre-application stage to create a more applicant-led process, with earlier technical input from PINS, removal of statutory consultation requirements and a greater focus on tracking the ‘main issues’ hopefully leading to a focused issue-led Examination.
There is undoubtedly a real effort being made in streamlining the process, but whether it will deliver on supposed time savings remains to be seen - as applicants are likely to remain nervous about shifting away from current practices on consultation, particularly with guidance removing procedural requirements yet still encouraging early engagement and consultation with all parties involved. There remains a need for Examinations to have no surprises - but how will this be achieved without supplying statutory consultees with sufficient information through meaningful (and time-consuming) consultation. But for data centre promoters, there is a lot to consider in deciding whether to progress projects through the DCO system.

Data Centre Options (DCO…?!)

 

Hugh Scanlon’s blog in December last year discussed the potential implications of the reforms and opportunities for promoters, and in particular the latest state of play regarding data centre NSIP opt-in. The Government’s July 2026 consultation response re-affirms the reforms for data centre consenting, in particular the apparent benefits of the approach for data centre projects, stating:
Much-needed infrastructure like data centres can now opt in to the NSIP regime that allows developers to rapidly deliver these projects, if granted, through strict, fixed timeframes rather than facing endless delays locally. Ministers have already directed three data centre proposals into the NSIP regime at Wapseys Wood in Buckinghamshire, Ampthill Road in Bedford[1], and New Barn Lane in Dartford.  
The tone set is to highlight the benefits of the DCO regime for data centre projects. However, while there is the possibility to opt-in, there is also the choice to opt out (if qualifying) where the SoS is satisfied that an alternative regime is appropriate for the development. Guidance on Powers to Direct a Project into or out of the NSIP Regime discusses the alternative consenting regimes under which qualifying developments that can seek to opt out of the DCO process may consider as appropriate alternatives. The obvious being the TCPA, which to date has been the clear or only route for most Data Centre projects, though not without its trials.

What differences between DCO and TCPA should data centre developers be considering?

 

The attraction of the DCO route is its offer of a nationally managed process without local politics at play, clarity of timeframes from submission, and a single development consent that brings together planning permission, compulsory acquisition powers and other consenting powers within a single decision which may be difficult to assemble through a standard planning permission. For large data centre campuses involving grid connections, energy generation, complex highway works, or the need for compulsory acquisition, the DCO regime could provide a more attractive consenting route to a locally determined planning application.
However, the DCO process is front-loaded, resource-intensive and can be procedurally demanding (even with the removal of statutory consultation requirements). Promoters need a mature scheme, an efficient consultation and engagement strategy to enable the key issues to be drawn out and dealt with early on, detailed environmental material and legal input throughout. The new PINS guidance on preparing the DCO application reinforces the transition to applicant-led issues tracking during the pre-application stage to ensure the scheme submitted is examination ready.

Is opting-in a real alternative for data centres?

 

With only three data centre schemes currently opting in, attitudes towards the NSIP consenting option appears less than enthusiastic.  Furthermore, two of these projects include on-site energy generation that would constitute NSIPs in their own right – in such circumstances, a single DCO for the entirety of the scheme (data centre and energy production) presents the only coherent consenting strategy for the proposals. However, earlier this month, a third was directed into the NSIP process, with the SoS stating in its Direction that the project by itself is nationally significant for the reasons of significant economic impact; driving economic growth; substantial physical size; and transboundary impacts. Perhaps we are on the cusp of a new wave of opt-in data centre schemes, as applicants look at the new streamlined consenting approach with new vigour? 
 

To opt-in or not? What should developers consider going forward?

 

In advance of the long-promised National Policy Statement (NPS) on data centres, there is some uncertainty as to the potential treatment of data centres in the DCO system. The Government’s positive attitude towards the sector is clear (see the NPPF, its designation as Critical National Infrastructure, and various appeal precedents), but the NPS will need to cement this support. Assuming this outcome, potential DCO applicants may want to consider the following in consenting strategy decisions:    
 
  • S35 qualifying criteria: Are projects of national significance? The opt-in mechanism depends on a Section 35 direction; it is not an entitlement. The promoter must demonstrate to the SoS that the project is nationally significant. Is there clear evidence to the economic impact and reach of the scheme; is the physical size and capacity that of national significance; is it important to the delivery of a NSIP or other significant development?
     
  • Other consents: Are compulsory acquisition powers required, or is there required links to power sources, grid infrastructure, highways or other enabling infrastructure that would require separate consents and licensing to enable delivery of the project?
     
  • Programme: The DCO process has statutory stages, with relatively fixed timeframes for most parts, and even with the removal of statutory consultation, the overall period is still likely to remain protracted. Comparison to other consenting regimes should be mapped with your planning consultant to consider realistic time savings.
     
  • Statutory consultee engagement: With the removal of statutory consultation, what’s ensuring the assistance of statutory consultees through the pre-application process – when their views and guidance on key issues to these major infrastructure projects is vital? The cost recovery system for some statutory consultees is a consideration but does not enforce the same mandatory participation in pre-application advice and consultation on NSIPs.
     
  • Local authority attitude to the sector/proposals: Local authority attitude towards development proposals is critical. Any reaction to an application proposal will of course be bespoke to the characteristics of that scheme and its context, but increasingly, issues related to power availability and a focus towards on-site job generation, rather than wider (and significant) economic benefit are heading agendas. Furthermore, with the rise in data centre development, promoters are facing increased interest from lobby groups, challenging the merits of the sector. Despite an NPPF direction to consider the needs of data centres in its plan-making and development management decisions, as a consequence of this context, the sector might find increased resistance to development proposals. In such a scenario with an unsupportive local authority, the DCO consenting option may well become a more attractive proposition.

 

In or Out?

 

The reforms represent a huge shift in NSIP consenting and only add to the attractiveness of the DCO process as a consenting option for major data centres schemes. Consenting strategies will remain dependent upon project circumstances, but Lichfields has witnessed an increased level of enquires from the sector exploring the possibilities on offer. The final piece in the jigsaw is the long-awaited data centre NPS – many are hoping that it will create sufficient encouragement to the burgeoning data centre sector to definitively tip the balance in favour of the ‘opt-in’. The early pioneers already the subject of successful s35 directions may be sitting pretty.

 

 

Footnotes

 

[1] Lichfields has advised on the data centre proposals at Ampthill Bedfordshire

 

CONTINUE READING

Assessing the draft London Plan's position on housing: does it make the grade?

Assessing the draft London Plan's position on housing: does it make the grade?

Sally Furminger & Ross Raftery 23 Jul 2026
The Mayor has now published his draft of the next London Plan. Some will contend that it feels like Groundhog Day[1] and others will debate whether it is a plan of realism or defeatism. What should be recognised is that drafting a London Plan in the current economic and regulatory context is an immense challenge and is one that the GLA has sought to grapple with directly.
In this blog, we deliver our initial verdict on what the draft London Plan means for housing in London and some of the key housing-related policies to look out for.
 

The requirements of an SDS

 

The government is embarking on a policy approach to roll out Spatial Development Strategies (SDSs) across England.[2] In its draft NPPF (December 2025),[3] the government defined a set of requirements (PM1) and a series of tests of soundness (PM14) that SDSs should meet.[4] The London Plan is likely to be the first SDS to be tested against these policies – and, as we consider below, this is likely to present another set of challenging decisions for its future Inspectors.
The draft NPPF (Policy PM1) requires that an SDS should, amongst other things:

  • set a positive vision for future growth and change

  • be genuinely strategic in nature and allow for more detailed issues to be considered and addressed through other parts of the development plan

  • set a strategy for a sustainable pattern of growth covering a period of at least 20 years

  • identify where changes to Green Belt boundaries may be needed to meet the development needs of the strategy area

How does the draft London Plan respond? With ‘only’ 558,000 homes

 

Just last year, in his ‘Towards a new London Plan’ consultation, the Mayor acknowledged that “The government has said London needs 88,000 new homes per year. So the next London Plan needs to plan for 880,000 homes, ten years’ supply.”[5]
However, the draft Plan does, in fact, only identify a strategy to meet 65% of London’s identified housing needs for the next 10 years[6] and not the 20 years required. With this approach, it seems inevitable that the next set of London Plan Inspectors will have a similarly difficult choice to make as their predecessors – considering whether it is better to have a plan in place versus the continued shortfall of housing in London which, following this strategy, would increase by a further 300k homes in the next 10 years. 
In doing so, they will need to consider this (draft NPPF, PM14): “A strategy which does not provide for objectively assessed needs should be considered an exception, and only where it is evidenced that stringent efforts have been taken to meet those needs through cooperation with other strategic planning authorities”
In another recent Lichfields blog,[7] we hypothesised how the Mayor could begin to meet the target of 1.69m homes over 20 years. Our conclusion was that there is a potential gap of c.850k homes and the inescapable reality was that London would need to look beyond its boundaries, to the South East, to address this need on a strategic basis. There is no indication that this engagement with South East authorities has taken place.
Misaligned to the draft NPPF expectations of SDSs,[8] the draft London Plan only sets housing targets for the first 10 years; however, it does suggest that more is possible, and there are opportunities to deliver homes up to and beyond 850,000 homes after 10 years.  This is not exactly a ‘strategy’ for sustainable growth as this overlooks the fact that a 20 year target (based on the current Standard Method and required by the draft NPPF) would be c.1.69m homes and therefore draft Policy HN1[9] would still result in a shortfall of up to 850k homes by 2047.  

Release of the Green Belt

 

Looking to the positives, for the first time, the London Plan sets specific greenfield housing targets, acknowledging that brownfield land alone will not be enough. But, this is clearly a tentative step. Just 8 (out of 14) outer London Boroughs are given a greenfield housing target,[10] and the total of these equates to just 10% of the Plan’s overall housing target. Moreover, these greenfield housing targets exclude the use of Metropolitan Open Land (MOL) – arguably a policy construct that is most within the realms of the Mayor to amend as the NPPF does not require or include this designation.

Preventing the Presumption?

 

The draft Plan sets out reasons why it is not possible for it to go further with housing targets in the ten-year period. One such (bemusing) justification is seeking to mitigate the risk that the plan-led approach would be undermined if unachievable housing targets are set for London Boroughs and they then fail the Housing Delivery Test and 5-Year Housing Land Supply tests, with their associated consequences.
However, with the level of need that London has and the shortfall that the Plan will create, these are precisely the circumstances in which a stronger presumption must be applied.

Borough-by-borough assessment

 

A role of an SDS is to tackle the politically-sensitive matter of apportioning the SDS area’s housing need within its constituent authorities. We have assessed the difference in annual housing target that each borough will experience, firstly relative to the London Plan 2021 target and then to the Local Housing Need (Standard Method).
There are some notable outcomes:
 
  • Bromley – despite being c.50% Green Belt and the Green Belt Assessment finding numerous parcels with potential to be grey belt, sees its target reduce, and no greenfield housing target set.

  • Conversely, Hillingdon will see a significant increase in its housing target, with a focus on greenfield housing.

  • Barnet adopted a Local Plan in 2025, however its annual housing target will now increase by 900 homes, albeit still remaining significantly below the LHN.

  • Tower Hamlets and Newham, despite being predominately urban authorities, both see their housing target from the current London Plan reduce, by 1,000 homes and 654 homes respectively.

  • Ealing – as part of the Mayor’s London Growth Plan which identifies it as a borough primed for major growth and investment (OPDC and West Tech London), will experience a significant annual increase in its housing target from the current London Plan (although a small decrease from the LHN.

  • Wandsworth – this will experience an increase of its London Plan target by c.700 homes (although c.1,600 below the LHN) in an urban borough without Green Belt.


 

What else to look out for? 

 

There is a lot of detail within the draft London Plan that we will continue to unpack in future blogs. However, the following are the key policy matters to note on housing:
 
    1. Optimising use of land and site capacity – draft Policy MBUL2 introduces the Optimisation Framework. This sets minimum density and height ranges for residential development, as informed by measures of sustainable access (‘SAM’) and setting. If this sounds familiar, it should – it is reminiscent of the 2016 London Plan Density Matrix, although that was removed for reasons that we’ve covered previously.[11] Our clients will also need to consider these minimums and whether they will prove to be a challenge, in practice. The current ‘design-led’ approach no longer features; however, we would strongly advocate for keeping this principle alive, as a flexible and practical approach to optimising housing sites.

    2. Tall buildings – under draft Policy MBUL3, Boroughs should identify the locations that may be appropriate for buildings of 30m+ (or higher, if locally appropriate) - using criteria in Box MBUL3A. Local Plans must also incorporate the locations for ‘metropolitan tall buildings’, defined by the GLA at Table 2.2. From initial review, this reads as an improvement on London Plan 2021 Policy D9[12] – it should assist to standardise the definition of a ‘tall building’ across Boroughs, ending the confusion where some Boroughs set the threshold as low as 20m; and, it includes flexibility, where robustly justified, allowing for proposals outside of identified tall building locations, or where there is departure from the criteria.

    3. Affordable Housing – overall, the draft plan proposes a more nuanced and targeted approach, with differential thresholds introduced in response to locational considerations, greenfield/brown field, ownership and proposed use. It identifies circumstances whereby the headline affordable housing threshold can be reduced based on tenure commitments, public transport delivery or a portfolio-based approach.  In doing so, the draft policy moves away from a more standardised, London-wide approach. Several of the proposed changes will go some way towards facilitating and incentivising housing development. For example, lower affordable housing thresholds in much of outer London and adjusted tenure expectations are welcome, and the ability to lower affordable housing requirements based on tenure commitments will help unlock developments.  At the same time though, the framework introduces a wider range of policy considerations than the current Plan, adding another layer of complexity to an already challenging system. See this recent blog from our colleagues, for further analysis[13].

    4. Green Belt – as above, draft Policy PV7 introduces the criteria for Green Belt release in London – but, only in the most sustainable locations, where sites are optimised, and densification is important, and necessary infrastructure improvements are enabled. Broad Locations for Growth in the Green Belt are identified (key diagram – chapter 2). Significantly, the draft Plan goes further than the draft NPPF (2025) in defining 'sustainable locations' in this context – i.e. sites within 1200m (or 15 minute) walking distance of ‘well connected’ stations at Figure 6.4; and, within 400m of high-frequency bus routes (Box PV7C). Reconciling this with the draft NPPF’s definition of "well-connected rail stations" (i.e. footnote 26 won't be straightforward. Indeed, Figure 6.3 shows a complete absence of qualifying stations across Bromley, Sutton, Hounslow, and south Hillingdon, in what feels like a missed opportunity – our initial delve into the evidence base identifies that this is because suitable Grey Belt/Green Belt release clusters of less than 3,000 homes have been excluded from the London Plan capacity. Paired with the additional "Green Belt sustainable design criteria" (Box PV7B), there is a far higher bar for Green Belt release in London. Landscape-led sustainable design is a requirement and Table 6.3 sets challenging average net density ranges of 90 – 160 dph and green space quantities, alongside typical building height expectations from 3 – 6 storeys. The ‘high bar’ approach of defining sustainable locations in the Green Belt also feeds through into the capacity-based housing targets, with several Borough's where potential Grey Belt is identified, not then necessarily compelled by the 10-year targets to release or plan for them.

    5. Metropolitan Open Land – following through on the 'Intend to Publish' document, the new draft Plan explicitly separates MOL from national Green Belt policy[15]. Potential new MOLs are also identified in evidence base. MOL purposes and functions are set out in draft Policy PV6, with a new emphasis on the public accessibility of such land and a suggestion (part E) that boroughs consider applying the MOL designation to Green Belt land which is wholly or largely contained within the urban area. There will be a separate blog to follow on MOL, unpacking what this means in practice for development of such sites.

    6. Housing size mix – anyone navigating varied housing mix policies across the Boroughs will be familiar with current Policy H10,which states that decision makers should have regard to (inter alia) the nature and location of the site, ‘with a higher proportion of smaller units generally more appropriate in those locations closer to a town centre, station or higher public transport access and connectivity.’ Draft Policy HN7 keeps the general premise, but it isn't as explicit, and we would question whether it will be as useful for securing pragmatism against more rigid local mixes.

    7. Housing design – as expected, draft Policy HN8 formalises the GLA’s recently published guidance on dual aspect homes. The more rigid language of current Policy D6 (which states single aspect units should ‘normally be avoided’), is proposed to be replaced with a more pragmatic direction: schemes should ‘seek to minimise’ them. This is a subtle but welcome shift, and one that is already assisting to optimise more constrained housing sites, without compromising design quality. Eagle-eyed planners/designers will also spot a metric tweak: minimum ceiling heights are set to drop from 2.5m (across 75% of the GIA) to 2.4m.

    8. Small sites –there is a continued focus on the important role sites below 0.25ha can play in meeting housing need, which is welcomed. The requirements of the London Small Site Design Code are expected to be met.

    9. Accessible housing – draft Policy HN9 – increases the requirements for M4(3)(2)(b) ‘wheelchair-accessible dwellings’ – 10% and M4(3)(2)(a) ‘wheelchair adaptable dwellings’ 10%. We expect this to have an impact on site optimisation and, ultimately, feed into viability.
    10. Minimum cycle standards – draft policy GHR11 sets the standards as per the aforementioned LPG. This is also welcomed - the standards are less onerous and reflect the reality of underutilised spaces in developments. Arguably this could go further, with a recognition that underused spaces should be designed for future adaptability for something more beneficial.

       

Our Initial Verdict: The Draft London Plan Report Card

 

Based on the draft NPPF’s tests of soundness for SDSs, we’ve given our initial verdict on the draft London Plan’s approach to housing matters:
 Footnotes 

 

[1] Based on the shortfall of the Plan to the level of need, the next set of London Plan Inspectors will certainly feel like they’ve been here before.

[2] In an attempt to signal a change in direction from the London Plan – the only example SDS that we have available – the government has states that it “does not intend to set a limit or range on the size or length of SDSs, but they are expected to be succinct, and not get into detail or locally specific issues.” https://www.gov.uk/government/consultations/areas-for-producing-spatial-development-strategies/areas-for-producing-spatial-development-strategies#spatial-development-strategies

[3] Which is now delayed to enable our incoming Prime Minister the opportunity to make his first mark on the planning system.

[4] The examination of the 2021 London Plan used the NPPF local plan tests of soundness as a proxy.

[5] https://www.london.gov.uk/sites/default/files/2025-05/Towards%20a%20new%20London%20Plan%20%28final%29.pdf

[6] The draft London Plan plans for 558k homes, against a standard method requirement of 848k homes.

[7] https://lichfields.uk/blog/2026/june/25/sound-prospects-from-abercrombie-to-opportunity-areas-to-the-next-london-plan

[8] Draft NPPF PM1 requires that SDS set out a strategy for a sustainable pattern of growth covering a period of at least 20 years.

[9] Which requires that Plan-making authorities should “positively plan for additional longer-term capacity of at least 850k up to 2047”.

[10] Compared to 18 London Boroughs with some Green Belt.

[11] https://lichfields.uk/blog/2026/january/05/draft-nppf-minimum-density-maximum-impact and https://lichfields.uk/blog/2015/november/9/the-logic-of-the-london-density-matrix

[12] It is also a clearer presentation of the policy position, which has been subject to appeal and High Court appeal precedents which established that a tall building proposal outside a designated area must not be automatically refused.

[13] https://lichfields.uk/blog/2026/july/22/affordable-housing-under-the-draft-london-plan-progress-or-further-complexity

[14] https://lichfields.uk/blog/2025/december/16/all-aboard-or-stuck-between-stations-how-the-new-nppf-might-unlock-growth-around-rail-stations

[15] Despite a recent appeal decision to the contrary, this clearly removes any suggestion that grey belt policies can be applied to MOL.

[16] Croydon Council to oppose draft London Plan over Green Belt proposals – NewStartMag

CONTINUE READING

Affordable Housing Under the Draft London Plan: Progress or Further Complexity?

Affordable Housing Under the Draft London Plan: Progress or Further Complexity?

Clare Catherall & Polly Butlin 22 Jul 2026
The publication of the Draft London Plan marks the latest chapter in the evolution of the Mayor's affordable housing strategy. Affordable housing remains one of the most important and debated areas of London planning policy. The challenge for the new London Plan is clear: it must provide a suitably positive platform to overcome the multitude of factors inhibiting housing development while providing a framework capable of supporting affordable housing delivery across different boroughs and under varying market conditions throughout the plan period.
While much of the Draft London Plan seeks to streamline planning policy and accelerate housing delivery, the affordable housing policy adopts a more targeted and nuanced approach. Rather than fundamentally changing the existing system, it builds on the current threshold-based approach and introduces a more varied set of requirements based on locational factors, land ownership, development type and scheme size. For developers, landowners, housing providers and local authorities, the changes present both opportunities and challenges.
The current London Plan’s approach to affordable housing has generated significant criticism in recent years. Many stakeholders consider the 35% threshold to be impossible to achieve in the current market, requiring developers to submit viability evidence, endure lengthy viability negotiations, and incur inhibitive late-stage viability reviews. In the face of profound economic headwinds, current policy has inadvertently slowed London’s affordable housing delivery to a near standstill. Against this backdrop, the Draft London Plan looks to retain and adapt the Mayor's threshold approach, introducing more targeted requirements that reflect London’s geographical sub-markets, differential land values and development economics across London.
The result is a proposed affordable housing policy framework that is far more location-specific than ever before. Affordable housing requirements for schemes over 35 units would vary under the new policy depending on borough location banding or land profile. Additional provisions then allow for relaxation of the applicable thresholds in certain circumstances. This creates a more bespoke and nuanced approach to affordable housing policy but also introduces far more variables for applicants and decision-makers to grapple with when assessing development proposals.
  
 

Adjusted Threshold Approach

 

The threshold approach remains at the heart of the affordable housing policy framework, but the Draft London Plan introduces significantly more variation than under the current London Plan.
Affordable housing thresholds now differ depending on:
 
·       Borough banding (map shown below).

·       Whether land is public sector land.

·       Whether development is proposed on Green Belt land.

·       Whether industrial land is involved.

 

The Draft London Plan also introduces consistency across different residential and living sector uses. Conventional C3 housing, co-living, PBSA and older persons' accommodation are all now subject to broadly aligned thresholds. Development on Green Belt land and estate regeneration remain exceptions, with schemes required to follow the viability-tested route unless they achieve 50% affordable housing.
Smaller housing schemes are also differentiated from larger developments, with a consistent, London-wide affordable housing threshold proposed in an attempt to unlock small- and medium-scale development. Developments delivering between 10 and 35 homes would be subject to a standardised affordable housing requirement rather than the full range of threshold variations, with 20% for non-Green Belt land and 50% for Green Belt land.
The approach creates the potential for different affordable housing requirements between neighbouring sites located in different boroughs, meaning that affordable housing obligations could vary on opposite sides of the same road. A development on one side of a section of Finchley Road in Barnet, for example, would have an affordable housing threshold of 20% (Band C) whereas a site immediately across the road in neighbouring Camden would have a threshold of 35% (Band A).
There is some flexibility built into the system though; boroughs in Bands B and C will be able to review and potentially amend their classifications through Local Plans where supported by viability evidence.
Importantly, the supporting text also proposes that changes to affordable housing thresholds can be made through London Plan Guidance or a focused review of the Plan, rather than through a wholesale update to the London Plan; a measure intended to avoid the legal challenges associated with the GLA’s recent emergency measures.
 
 

Tenure Mix

 

One of the more welcome changes is the relaxation and simplification of affordable housing tenure requirements.
The existing London Plan’s suggested tenure split, which sought to achieve 30% Social Rent, 30% intermediate housing and 40% to be set locally by the borough, has been replaced by a more streamlined 60/40 social rent to intermediate tenure split. Given that most adopted Local Plans currently seek a 70/30 split between social rent and intermediate, this will provide greater flexibility to introduce a higher proportion of intermediate homes.
The Draft London Plan also introduces Key Worker Living Rent (KWLR), a new affordable housing product. The introduction of KWLR reflects growing recognition of the housing affordability pressures faced by middle-income workers who do not qualify for traditional social housing but equally remain priced out of market housing. These units will include rents set according to average household income, they will be more affordable than private rented homes, and the expectation is that tenants can stay in the long term, but they also allow for flexibility if short-term tenancies are required for employment reasons.
 
 

Circumstances Supporting a Lower Threshold

 

Perhaps most significantly, within nearly all location bands or land profiles there are potential circumstances outlined where the threshold affordable housing requirement is altered where certain tenure or infrastructure circumstances are met (see table 3.2 below). For example, a scheme in location band A delivering 100% social rent could see its threshold lowered from 35% to 25%, while a scheme in location band B that is at least 80% KWLR could see its threshold reduced from 25% to 20%. However, in this latter example the reduction for the new KWLR tenure only applies in the current draft to Build to Rent schemes.
 

Draft London Plan Affordable Housing Policy HN3 Table 3.2

 

Location or land profile
Affordable housing requirement
Circumstances under which the threshold affordable housing requirement is altered
Altered affordable housing requirement
Location band A
35%
Development is for 100% social rent homes    
OR
100% KWLR Homes in the case of BtR development   
25%
Location band B
25%
Development is for at least 80% social rent homes  
OR
at least 80% KWLR homes in the case of BtR
20%
Location band C
20%
None
N/A
Green Belt land
50%
Development is proposing significant transport infrastructure delivery
35%
Public sector land
40%
Development is proposing significant strategic transport (or in some limited cases – subject to agreement with the GLA – strategic health) infrastructure delivery
OR
is part of a Public Sector Land Portfolio Agreement with the Mayor
25%
Industrial land
35%
None
N/A

 

One notable area of uncertainty from this table is the reference to the delivery of "significant transport infrastructure” or “significant strategic transport” which would influence threshold requirements on Green Belt and public sector land respectively. Without clearer definitions of these terms, there is likely to be debate over what level of infrastructure/transport delivery justifies a change in affordable housing expectations.
 
 

Purpose Built Student Accommodation (PBSA)

 

The Draft London Plan introduces a more favourable framework for PBSA based around three alternative affordable housing options. PBSA developments are subject to the threshold approach and can follow the fast track through committing to either:
 
·       On-site affordable student accommodation at the same levels as C3 housing; or
 
·       A combination of 10% affordable student provision and a payment in lieu towards conventional affordable housing; or
 
·       Provision of conventional C3 affordable housing on-site at the same levels.
 
This represents a more flexible approach than previous policy and appears designed to encourage greater contributions from PBSA towards conventional C3 affordable housing delivery where appropriate.
 
 

Co-Living

 

The co-living sector is likely to be one of the biggest beneficiaries of the Draft London Plan’s approach to affordable housing. The current London Plan itself promotes a payment-in-lieu based approach to affordable housing for co-living schemes. The GLA’s Affordable Housing LPG then introduced the option for co-living schemes to provide C3 affordable housing on site. This has unlocked many co-living schemes across the capital, however, co-living (like PBSA) was excluded from the GLA’s emergency measures, meaning that a higher affordable housing threshold continues to apply to co-living schemes than conventional housing. The Draft London Plan now looks to rectify this. It continues to support on-site C3 conventional affordable housing provision under the threshold route, but, importantly, co-living schemes are now subject to the same affordable housing thresholds as conventional residential development. This brings greater consistency across housing typologies.
This approach will be particularly welcomed in boroughs within Locational Bands B and C where the affordable housing threshold for co-living (and other housing products) would be lowered to 25% and 20% respectively. This means that co-living developments in appropriate locations within Brent, Ealing, Greenwich, Haringey, Lewisham, Newham and Waltham Forest can follow the fast-track route with 25% affordable housing, while co-living schemes in Harrow, Hillingdon, Hounslow and Kingston are able to do so with 20% on site C3 affordable housing. 
 
 

Estate Regeneration

 

While the Draft London Plan's overall approach to estate regeneration remains broadly unchanged, a number of specific alterations are proposed to be introduced.
Estate schemes delivering 50% affordable housing, including the replacement of existing homes, will now be able to utilise the Fast Track Route. While this is a positive change, the threshold remains challenging for many estate regeneration projects that already face significant viability pressures.
The policy also strengthens the existing requirements for replacement housing, with existing Social Rent homes expected to be replaced as Social Rent homes regardless of whether existing residents have a right to return. In practice, many estate regeneration projects already deliver replacement Social Rent housing through grant-supported delivery programmes, so the practical implications may be limited.
The Draft London Plan also places greater emphasis on options appraisal work where development proposals include the demolition and replacement of affordable homes. This is a strengthened requirement of the existing policy, requiring a robust assessment of the benefits and disbenefits of alternative options and ensuring potential benefits of demolition and replacement are weighted against wider social and environmental impacts.
 
 

Viability Reviews

 

The proposed approach to viability reviews in the Draft London Plan remains largely unchanged. All developments are still expected to undergo early-stage viability reviews where ‘substantial implementation’ has not progressed within an agreed period from the date of the permission (typically two years). A late-stage review is still required for viability-tested schemes on completion and occupation of 75% of their proposed units. Mid-term reviews may also be imposed for large, multi-phased permissions.
The Draft London Plan does introduce new policy wording which places increased emphasis on the quality and credibility of viability evidence. Decision-makers are directed to consider whether an appraisal is "objective, reasonable and realistic" before determining what weight should be given to it in the planning balance. This is likely to increase the importance of well-reasoned narrative justification alongside viability appraisals, requiring applicants to demonstrate not only that their assumptions are robust, but that the overall viability assessment presents a credible picture of deliverability.
 
 

Modular Temporary Accommodation

 

The Draft London Plan includes explicit support for modular temporary accommodation as a meanwhile use. This reflects the growing role that temporary modular housing can play in addressing urgent housing need, particularly on sites awaiting longer-term redevelopment. The policy acknowledges the potential to optimise underutilised land in the short term while contributing towards immediate local housing needs.
 
 

Lichfields’ Thoughts

 

The Draft London Plan proposes a more nuanced and targeted approach to affordable housing, with differential thresholds introduced in response to locational considerations, a site’s Green Belt status, land ownership and proposed use. It also proposes circumstances whereby the headline affordable housing threshold can be reduced based on tenure commitments, public transport delivery or a portfolio-based approach to affordable housing.  In doing so, the draft policy moves away from a more standardised, London-wide approach to affordable housing.
 
Several of the proposed changes will go some way towards facilitating and incentivising housing development. For example, lower affordable housing thresholds in much of outer London and adjusted tenure expectations are welcome, and the ability to lower affordable housing requirements based on tenure commitments will help unlock developments. A more standardised approach to living sector uses, bringing co-living, PBSA and older persons accommodation in line with C3 housing, is a particularly positive move and will be welcomed by many co-living and PBSA developers
.
At the same time though, the framework introduces a wider range of policy considerations than the current London Plan, adding another layer of complexity to an already challenging system. Borough bandings, land-based classifications, varying thresholds and alternative compliance routes mean that affordable housing requirements will increasingly depend on the specific characteristics of both the site and the development being proposed. As a result, there is likely to be a greater emphasis on testing different delivery scenarios and affordable housing outcomes at the inception of each project and throughout the planning process.
The big question is whether the Draft London Plan goes far enough to accelerate housing delivery, while delivering the affordable homes London needs. The proposed policy introduces more flexibility and incentivisation in some areas, but the fundamental structure remains heavily reliant on threshold testing and viability review mechanisms. In the current climate, many schemes will continue to be unable to meet the threshold requirements, and the viability-tested route and associated review mechanisms will remain a significant deterrent to investment.
Ultimately, the Draft London Plan seeks to balance a number of competing objectives: unlocking housing delivery amidst a long-stalled market, securing enough affordable homes, responding to sub-regional market variations and accommodating a range of products and uses within London’s increasingly diverse housing sector. Whether the proposed policy provides a suitably sophisticated and nuanced framework to unlock delivery, or simply adds to the complexity and gridlock of delivering affordable homes in London, will no doubt remain a key question considered as the Draft London Plan moves through consultation and examination.

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‘A BLG, or not a BLG, that is the question’: the Draft London Plan’s approach to industrial land

‘A BLG, or not a BLG, that is the question’: the Draft London Plan’s approach to industrial land

Nena Pavlidou 21 Jul 2026
The draft London Plan had its debut on Thursday 16 July, almost a year after the ‘Towards a new London Plan’ consultation was initially released (our thoughts on that consultation are set out in Planning for industrial land in London: Time for a new approach?). The previous consultation hinted at potentially significant changes in the approach to protecting and planning for new industrial land in the capital. Below we set out some initial observations of whether the draft Plan delivers on that promise.
From a first reading, it seems that planning for industrial uses has clearly moved up on the Mayor’s agenda. In essence, the draft Plan is seeking to adopt a two-part strategy:
  1. to signal where industrial land can be released in a managed way to provide additional housing capacity in accessible, high-demand locations, and, 

  2. using the Green Belt to ensure new industrial provision is brought forward.
For the latter, chapter 4 ‘Growing London’s economy in a way that benefits all’ highlights that the evidence shows increasing demand for industrial land in the capital due to the logistics requirements associated with changing shopping patterns and the associated requirements of an increasing population, alongside the need for infrastructure to support a growing economy.
In addition, it is stated that, reflecting on the constrained supply to accommodate both housing and economic needs, policy needs to balance the different requirements and ‘direct them to the most appropriate locations’, whilst minimising adverse impacts. The Plan makes particular reference to the key supporting infrastructure uses such as data centres and logistics, and their importance for the capital’s economic growth. Recognising that these uses are perceived to have disproportionate environmental impacts, the Plan emphasises the opportunity to harness the growth potential of industrial and related uses while also protecting the capital’s environment and serving the communities through proper planning and mitigation. 
We consider each of the main policy provisions in more detail below.
 

Policy GLE2 – Supply of industrial land

 

Policy GLE2 directs Borough Local Plans to accommodate strategic needs (GLE2.A) following the strategic storage and distribution benchmarks set for each Property Market Area (‘PMA’) (Table 4.1) and by Borough (GLA: London Plan Industrial Evidence Paper, July 2026) (see interactive map below), alongside any sui generis uses need that are dependent on industrial land. These are presented as indicative demand figures to 2036 and 2050. Havering, Hillingdon, Barnet and Bexley stand out as all having identified needs above 75,000 sq.m (equating to c.20+ hectares) to 2036.
The methodology that underpins these estimates is presented in the Economic Uses Demand and Supply Study (2026), which utilises consumer expenditure and Gross Value Added (GVA) projections (based primarily on 2024 data) and applies a ratio to translate how much floorspace is needed based on the existing (2024 baseline) relationship between consumer expenditure, GVA and warehouse stock. However, using a ratio that might effectively reflect an already constrained position – which is clearly the case in terms of London’s current (and historic) stock of logistics space – to project future needs comes with the risk of underestimating future requirements.
It would seem prudent that a latent demand allowance should, as a minimum, be added to these estimates. The evidence suggests that an 8% vacancy rate was captured in 2024 and therefore there is no need for additional allowance, but some caution needs to be applied when relying on the average figure for the whole of London in just one year. A longer-term trend and one that reflects the different sub-geographies of London would seem a more robust approach.
In addition, given the pressures from other uses, and the fact that the draft Plan advocates clearly for some selective release of industrial land, the absence of any loss allowance as part of the assessment of future needs also appears problematic.
Figure 1 below presents the draft Plan’s indicative benchmarks for storage and distribution needs by Borough (and corresponding Property Market Area – PMA), but we would emphasise that these are likely to represent a minimum position in view of the factors outlined above.
 

Figure 1: Interactive map

 

Policy GLE2.B also encourages the further utilisation of existing industrial sites by suggesting re-activation of vacant premises and a review of brownfield and other designated land for intensification. In some ways, this carries over Policy E7 of the current London Plan on intensification (which is directed in more detail in Policies GLE2.G and GLE2.H). However, the evidence indicates that E7 has not significantly increased the amount of industrial floorspace, so it remains to be seen how such an approach can be made more effective through the next Plan. The new dimension is that Policy GLE2.B requires active collaboration across Boroughs within the same PMA by pooling their respective capacities and planning to re-provide capacity in advance of any release elsewhere. However, there is no specific guidance on how this process might be expected to work in practice, and would require very close coordination of respective Borough local plans.
GLE2.C retains the Strategic Industrial Locations (SIL) and Locally Significant Industrial Sites (LSIS) designations that have been a long-standing feature of the London Plan, but requires boundaries to be reviewed for the purposes of designating additional industrial land and releasing currently designated industrial land in appropriate locations. GLE2.D encourages designating existing storage and distribution sites that do not have such a designation at the moment as SIL/LSIS. This gives currently undesignated industrial site owners and promoters a clear basis to secure formal designation of land through the expansion of SILs/LSISs based on the provisions of Policy GLE2.C or GLE2.D, either at the Borough or potentially PMA level.
The strategy appears to be trying to ‘claw back’ some of the 18% loss of industrial land that has occurred during the last 20 years by formalising arrangements on currently undesignated industrial land. This approach also fits with the principle of repurposing land to better meet modern industrial business needs – with older central industrial locations giving way to residential development, and higher performing sites and distribution centres on the outskirts being brought into protective wrapper provided by SIL/LSIS designation. However, it remains to be seen whether just adjusting the boundaries of designations to reflect on the ground realities will actually lead to any meaningful increase in industrial capacity.
Ultimately, the key question that remains is where new industrial land in London can be accommodated. Policy GLE.E (alongside MBUL1 and PV7) encourages Green Belt releases in identified Broad Location of Growth (BLGs) and urges London Boroughs to release land in their Local Plans. The BLG Green Belt Industrial and ‘Future Candidate Industrial Sites’ (see Figure 2 below) reflect a range of locations around London, although not all align with the areas which have the greatest identified levels of need. We discuss this further below in the context of Policy PV7.
 

Policy GLE3 – Data centres

 

Policy GLE3 asks Boroughs to proactively allocate land for data centres in suitable locations based on specific criteria to meet the need, and if no such sites are identified, Policy GLE3.B encourages first to collaborate with neighbouring authorities within or outside London and secondly to consider grey belt or edge of Broad Locations for Growth (BLGs) in the Green Belt if no brownfield sites are available.
This is a significant shift, placing data centres at the centre of the planning system in London for the first time. The effect, in combination with Policy PV7, is to give more flexibility when considering data centre proposals within the Green Belt, on grey belt sites, or the edge of BLGs in the Green Belt where the other requirements of this policy are met. This differs from the approach to industrial uses, including storage and distribution, where, due to HGV trip generation, they are directed only within the identified Green Belt industrial BLGs. Therefore, it is implying a more flexible approach to planning for meeting data centre demand which is to be welcomed.
This flexibility will be essential. The evidence base indicates that significant additional land-take may be required to facilitate data centre expansion between 2025 and 2050. This is to accommodate an approximate additional 5GW of projected demand between 2031 and 2050, reflecting current connection queue and energy network projections. Capacity up to 2030 is assumed to meet just 20% of future demand.
 

Policy PV4 – Strategic economic clusters and corridors

 

The Plan identifies 18 strategic economic clusters (Table 6.1), alongside those in the “key economic diagram” where Local Plans should focus their economic strategies and support the provision of necessary infrastructure, land uses, property and associated public space. In terms of development management, PV4.C encourages proposals to align with the priorities and the specialist sectors of each cluster alongside other supporting uses (and as appropriate housing).
The key clusters are focused primarily on health/life sciences, technology & innovation, media, education and sports & leisure, with the exception of three areas, namely the Heathrow Economic Area (Hillingdon, Hounslow), Great West Road/Golden Mile (Hounslow) and Dagenham East (Barking & Dagenham), where industrial uses are also included within the key sectors.  Based on these examples, it is clear that there is a direction to promote industrial uses further on the outskirts of the capital and, combined with GLE2.D, to designate existing distribution sites on the periphery as SILs/LSISs and to contribute new supply as identified by PV7 (BLGs – GB Industrial Sites).
 

Policy PV5 – Industrial land supporting housing growth

 

Eight industrial sites within LSISs (Table 6.2) have been identified for further industrial releases for residential development; alongside ‘scattered’ non-designated industrial sites which are encouraged to be considered as brownfield land for residential development (PV5.C).
There may be overall planning merits to such an approach having regard to the draft Plan’s need to accommodate housing needs in the round, but as noted above, both planned and ‘windfall’ losses of scattered non-designated industrial sites leads to further under-accounting when it comes to the future needs equation and how capacity lost from the system through one policy will be adequately compensated by another.
 

Policy PV7 – Sustainable development and enhancement of the Green Belt

 

The draft Plan gives weight to strategic exceptional circumstances to release Green Belt to deliver major industrial-led (and/or residential) schemes in locations where a BLG is identified. As introduced through Policy GLE.E noted above, there are nine locations close to motorways identified as ‘BLGs – GB Industrial Sites’, two ‘BLG Green Belt Future Candidate Industrial Sites’, and one ‘Mixed Residential and Industrial Candidate Site’.
The draft Plan Annex C, Table C2: Industrial Green Belt Broad locations growth (BLG) reference table – (storage and distribution), provides more information for these sites to support the key diagram, lists 11 industrial Green Belt locations – albeit the referencing is not entirely consistent with those listed on the Economy sub key diagram. Extracts from the key diagram are provided below.
 

Figure 2: Green Belt Industrial Sites

 


Policy PV7.D (1) states that industrial development proposals in the Green Belt should demonstrate unmet needs that could not be met elsewhere as established by GLE2 Supply of industrial land. In addition, PV7.D (2) requires meeting the location tests set out in Box PV7A, where the key for industrial developments is that a benchmark distance of 2,500 metres of a junction with a suitable section of the strategic highways network shown to have adequate capacity and flow rates to accommodate additional lorry movements.
 
Last but not least, PV7.E states that when considering major development proposals outside of BLGs, significant weight should be attributed to a failure to meet any of the location tests set out in Box PV7A – C; and such schemes should demonstrate that they would not undermine the ability, directly or indirectly, to deliver any strategic BLG, including any necessary supporting infrastructure with particular focus (for non-residential schemes) on cumulative impacts on transport infrastructure, the delivery of prioritised transport improvements, impacts on sensitive heritage, biodiversity and landscape assets and parking provision (PV7.E.1-3). The draft Plan clearly anticipates a Plan-led BLG approach, even if they are not particularly well defined at this stage, and seeks to ensure that any industrial development beyond these does not undermine their ability to be delivered.

Conclusions

 

From our initial review of the draft Plan, industrial development and data centres feature much more prominently than before.
It is positive that there is a direction to revive underutilised, obsolete industrial locations that, due to their current characteristics and environs, realistically no longer meet modern business needs. This land is clearly signalled as being suitable for release to other uses.
However, it remains unclear whether the Plan will actually be capable of accommodating the industrial land needs identified, particularly strategic storage and distribution uses. The last two decades have seen significant losses of industrial land, while latent demand for industrial land over this period has gone unmet. The draft Plan is actively providing for further releases, both planned and of ‘scattered’ sites with no designations.
In this context, it remains to be seen whether extending SILs/LSISs boundaries to better reflect – and in theory protect – existing stock, and only a few targeted Green Belt releases associated with the identified BLGs, will necessarily 1) create the extra capacity needed, and 2) support development in the locations of greatest commercial market demand. The GLA may be hoping that the additional flexibility for Boroughs to plan across PMAs will assist in better balancing existing and new capacity, but such an approach depends on sufficient coordination and cooperation as individual Local Plans are brought forward, and may not provide sufficient certainty to the market. In any event, for the reasons noted above, the need requirements that have been set are likely to represent an under-estimate.
The commercial property sector has had high expectations for the next London Plan, and the consultation draft goes some way to addressing these by introducing a more sophisticated approach to industrial land policy more generally. However, in identifying needs, the draft Plan needs to go further in setting out more definitively how these needs will be met – currently the unmet needs issue is largely left unaddressed. The consequence is that ‘a BLG, or not a BLG’ will now be one of the over-riding questions for future industrial development, particularly for larger requirements on the outskirts of London, and those which interface with the Green Belt. The consultation is open until 15 October 2026.

 

 

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