Protracted planning timelines and escalating costs are constraining the supply of new housing in the capital with new-build properties making up less than 8% of homes currently listed for sale.
According to research by London estate agent Benham and Reeves it now takes an average of 25.7 months for developments to move from a planning application to the start of construction – two months longer than last year and the slowest rate in more than a decade.
Even once planning is secured, builders face further delays, with work typically taking 16.3 months to commence, almost four months longer than a year ago.
As a result, new-build homes account for just 7.5% of all listings across London.
LONDON VARIATIONS
Some boroughs, including Newham (12.9%); Hackney (12.8%) and the City of London (12.4%), see new builds make up more than one in ten homes for sale.
But in other areas, the figures fall to some of the lowest in the capital, with Richmond upon Thames (2.4%); Kingston upon Thames (2.7%); Redbridge (2.9%) and Havering (3.2%) all below 3%.
Marc von Grundherr, Director of Benham and Reeves, says: “London’s housebuilders are more than willing to deliver the homes this city so desperately needs, but they continue to face obstacle after obstacle.
“From the red tape of planning delays to the ballooning cost of labour and materials, as well as higher borrowing costs and subdued buyer appetite, the challenges are substantial.”
CONFIDENCE BOOST
And he adds: “The end result is that new homes account for less than 8% of total listings, with some boroughs seeing barely 2% to 3% of their available stock built within the last few years.
“This is nowhere near the level of delivery required in a city of London’s size and demand.
“The good news is that 2025 already looks to be a year of greater momentum. As market confidence improves and more developers are encouraged to bring schemes forward, we should begin to see a healthier pace of delivery and a growing share of new-build homes hitting the market.”
