Reactions from industry experts highlight a significant downturn in the London new build housing market, with many expressing concern over the current state of sales. The latest figures reveal that only 5,606 new build homes were sold in the first half of this year, a sharp decline of nearly 37 percent compared to 8,840 sales during the same period last year. This downturn is particularly striking when juxtaposed with the 20,280 new builds sold in 2022.
Current Market Conditions
Data from the Land Registry indicates that certain months have seen alarmingly low sales figures, such as February, which recorded merely two new build transactions against 4,189 existing properties sold. Additionally, research from property consultancy Molior shows that a staggering 4,629 new build homes remained unsold in the three months leading up to June, representing an estimated £3.5 billion worth of housing stock. This figure marks the highest level of unsold new builds ever recorded.
Historically, the average monthly sales of new build properties have hovered around 1,000 since 1995, according to Land Registry data. However, the current market has prompted many developers to halt projects, with 56 developments currently paused and 3,913 homes left mid-construction. The situation is expected to worsen, as 70 percent of homes currently under construction are projected to be completed by the end of 2027, leaving only 8,750 homes anticipated to be on site by January 2028.
Factors Contributing to the Decline
Several factors have contributed to the decline in new build sales, with rising construction costs being a primary concern. Reports indicate that the cost of constructing a home in London has surged by 75 percent since 2016. For instance, the expense of building a typical two-bedroom flat measuring 70 square meters has escalated from £245,000 in 2016 to approximately £430,000 today.
Moreover, the presence of British homebuyers in the London market has dwindled significantly, with only 3,320 new builds purchased by British owner-occupiers in 2025, which includes both first-time buyers and those moving homes. This trend underscores the challenges faced by potential buyers in a market characterized by high prices and limited availability.
Expert Insights
Jeremy Matallah, co-founder of the rent-to-buy initiative Keyzy, emphasizes that the combination of leasehold complications and soaring prices has made homeownership increasingly unattainable. He states, “For many first-time buyers, the biggest obstacle is saving for a deposit while paying London’s sky-high rents. Every day we speak to people who can afford the monthly cost of homeownership but can’t raise the deposit.”
With sales to UK individuals dropping by nearly 40 percent over the past two years, it is evident that ordinary Londoners are finding it increasingly difficult to enter the housing market.
Market Dynamics and Competition
The demand for new build homes in London has largely been fueled by corporate buyers, with individual purchasers accounting for only one in five new build sales. Major developers such as London Square hold just over 5 percent of the market share, while Berkeley Group is responsible for 16 percent of the city’s private homes. Vistry Group commands nearly 5 percent of the market.
Tim Craine, director at Molior, notes, “Many investors are selling properties acquired five to 15 years ago, often at prices 20 percent below comparable new-build homes.” He points out that in areas like Canary Wharf, around 1,000 second-hand new-build apartments are currently on the market, creating excess competition that suppresses prices and discourages new developments from starting.
Quality Concerns and Future Outlook
Andrew Pemberton, a chartered building engineer and senior manager of surveying at the Professional Snagging Company, adds that the challenges facing London’s housing market are multifaceted. He explains, “Affordability continues to cool demand, but buyer confidence in new-build quality remains fragile. We’re seeing some of the best quality homes we’ve inspected, yet there’s still huge inconsistency, even between phases of the same development.”
With rising construction costs forcing many builders to slow down their delivery timelines, it is clear why the market has lost its momentum. As the situation evolves, stakeholders in the housing sector will need to navigate these challenges to restore confidence and stimulate demand in the new build market.
Quellen: standard.co.uk, tagesschau
Bildquelle: Bildquelle: Wim van ‚t Einde auf Unsplash
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