House construction in London has plummeted by 84% over the past decade, according to a recent study, despite the city requiring 88,000 new homes each year.
Research conducted by consultants Molior revealed that only 5,547 new private-sector residential homes were initiated in 2025, a stark contrast to the 33,782 starts recorded in 2015.
Impact on Housing Stability
Lord Bailey, a member of the London Assembly, remarked that the housing crisis in London has escalated from „difficult to devastating,“ emphasizing that „ordinary Londoners are suffering the most.“ A representative for the Mayor of London stated that addressing the urgent housing crisis remains a top priority, asserting that Mayor Sadiq Khan is committed to increasing the availability of homes across various tenures. In light of the severe weather conditions, there are calls to activate emergency shelters for London’s homeless as temperatures plummet.
Bailey further expressed concern, stating, „This is not just a housing crisis anymore; it is a crisis of stability, opportunity, and dignity.“ He warned that the mayor’s policies would lead to a significant decline in housebuilding, a prediction that has unfortunately come to fruition.
Current Construction and Future Projections
By the end of this year, approximately 18,326 homes are anticipated to be completed in London, which represents about half of the homes currently under construction. Additionally, 14,053 homes are not expected to be finished until 2027 or later, accounting for only 8% of the government’s target of 176,000 homes over two years for London, resulting in a staggering shortfall of 92%.
Construction has also been suspended on 5,009 homes across 51 development sites in the city. Molior attributes this halt to building contractors potentially going bankrupt due to elevated construction costs or intentionally delaying projects in response to a sluggish sales market.
Sales and Government Initiatives
The firm noted that only 8,436 new homes were sold in London during 2025, a situation it described as directly impacting the number of new construction starts. To meet government objectives, at least 22,000 homes must be sold each quarter.
A spokesperson for the Mayor of London highlighted that this year, efforts are underway to encourage housing providers to apply for a record £11.7 billion in government funding through the Mayor’s Affordable Homes Programme, aimed at delivering social and affordable housing throughout the city.
Additionally, a new City Hall Developer Investment Fund, initially backed by £322 million, is set to support large-scale projects in London. The government has also confirmed its backing for plans to extend the Docklands Light Railway to Thamesmead, which could facilitate the development of up to 30,000 new homes on both sides of the river.
Challenges Ahead
Khan has attributed the decline in housebuilding to several factors, including the „disastrous legacy of the previous government,“ high interest rates, rising construction material costs, the effects of the pandemic and Brexit, as well as delays from the Building Safety Regulator. In response, Lord Bailey insisted that it is time for the mayor to take accountability, asserting that his policies have hindered development, slowed progress, and left Londoners grappling with escalating rents and soaring property prices, ultimately forcing many out of the city they call home. Furthermore, the impact of crime trends on London’s safety perception adds another layer of complexity to the ongoing housing crisis.
As the city grapples with these challenges, plans are underway for new developments, including 220 new homes planned at the South London Leisure Centre construction set for 2026.
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Bildquelle: Bildquelle: Wim van ‚t Einde auf Unsplash
