Independent analysis commissioned by the Secretary of State for Housing, Communities and Local Government echoes the urgency. A review of the London Plan (Jan 2024) by a panel of expert advisors supported by Lichfields found significant under delivery against existing targets, a shrinking pipeline of permissions, and warned that without a required step change London risked a shortfall of over 150,000 homes by 2028/29.
This is consistent with more recent reports of a fall in new housing starts and completions amid cost inflation, higher interest rates and wider economic pressures, reinforcing the need for new land sources and more flexible delivery mechanisms, such as the emergency package of time-limited support for housebuilding in London first announced in October 2025.
The emerging London Plan is focused on diversifying and expanding sources of capacity for housebuilding, retaining a brownfield first approach alongside a targeted limited review and release of green belt land, transport linked nodal intensification, and an appraisal of the potential for larger-scale urban extensions. New types of sites are required to contribute to housing supply alongside town centres, small sites and Opportunity Areas.
In this context, out of centre retail parks represent one of the clearest and most immediate opportunities to pivot from low intensity land use, with areas predominantly occupied by car parks and single storeys, to residential led mixed-use communities. Unlike designated town centres, retail parks are not generally protected in policy terms and are explicitly identified in the current London Plan as a priority source of housing capacity through “mixed use redevelopment of car parks and low density retail parks and supermarkets” (Policy H1). These policies create a clear mandate for the intensification of development on retail parks where accessibility and placemaking characteristics support change.
Retail parks proliferated on the back of a simple promise of frictionless access to ‘big box’ retail stores by car, with plentiful free parking. However, recent changes have challenged the planning support for such uses as online spending has reduced demand for new brick-and-mortar floorspace, hybrid working disperses weekday traffic, and operating costs increasing challenge marginal stores leading to high-profile retailers falling into administration.
Where footfall has remained relatively resilient, some stronger performing retail parks have experienced higher rental growth than other retail formats, rising existing use values (EUV) and complicating near term redevelopment viability. However, the opportunity cost of retaining low‑density, single‑use sites is rising as housing pressure intensifies and policy increasingly favours design‑led optimisation on well‑connected brownfield land. This raises the prospect of phased, design led strategies that allow for continued trading where necessary while progressively reorienting sites into the surrounding urban fabric.
In short, housing need and policy imperative aligns with market reality to identify retail parks as one of the most practical brownfield assets to quickly and meaningfully contribute to London’s housing supply, provided schemes are well located and design led, with a clear focus on viability.
Over 2025-2026 Lichfields has undertaken an analysis of London’s retail parks, partnering with the Academy of Urbanism to identify guiding principles for a design‑led approach to release these development opportunities through the optimisation of brownfield land, helping to deliver sustainable, mixed‑use neighbourhoods that can contribute meaningfully to London's housing needs while creating better places, stronger communities and enhanced local centres.
