Lewisham council in southeast London is planning to transfer public land valued at up to £2 million to community-led groups to encourage the construction of new social housing. The initiative, revealed in papers presented at a council cabinet meeting on Wednesday, forms part of a broader housing strategy aimed at addressing the borough’s housing shortage by bypassing traditional reliance on private developers.

The Green-controlled council intends to allocate parcels of public land to housing cooperatives and other community organisations on the condition they develop affordable housing. In some cases, the land may be placed into community land trusts, legal entities designed to maintain long-term affordability. Additional support measures include potential low-interest loans and pre-approved planning permissions to expedite development, with the strategy expected to be implemented within the next year.

This approach seeks to address what Lewisham officials describe as structural limitations in the conventional system, where private developers build approximately three-quarters of new UK homes, and local authorities construct a very small share. Typically, councils negotiate with developers for a percentage of social housing within larger projects, but these negotiations often result in reduced affordable units. Daniel Dream, Lewisham’s cabinet member for inclusive regeneration, planning, and housing delivery, said the current model is inadequate to meet demand, emphasizing that “we’ve got to get more creative about how to deliver social housing” by empowering communities to “deliver community.”

While selling public land can be challenging due to a 1972 law that requires public bodies to accept the highest bid, a loophole allows local authorities to sell sites valued at £2 million or less to selected buyers at reduced prices or even for free, provided the transaction benefits the community. Lewisham’s strategy leverages this exemption to facilitate community-led housing projects. This could be especially impactful for small sites—defined in London as plots under 2,500 square meters—that often lie unused because they are unappealing to large developers. Research estimates that London has enough small site land to accommodate 850,000 new homes, with Lewisham alone potentially able to build nearly 10,000 homes across more than 3,000 small sites.

Experts argue that modest developments on small sites tend to yield higher-quality housing that integrates better with local neighbourhoods, contrasting with the larger-scale, often uniform developments driven by major developers. Lewisham has a history of community-led housing initiatives, including construction projects from the late 1970s that enabled families to build their own homes, the establishment of London’s first Black housing cooperative in 1997, and a recent 36-home community land trust development in 2024.

Despite this legacy, Lewisham has faced criticism for certain recent developments, such as The Filigree, a large residential and commercial complex that received a Carbuncle Cup nomination earlier this year for poor design. The new strategy aims to revive community participation in housing delivery and move away from relying on private developers to supply social housing piecemeal. Although community-led projects alone will not meet Lewisham’s target of 30,376 homes over 15 years, the council views them as a vital component of a more sustainable and equitable housing approach that could have implications beyond the borough if adopted elsewhere.