New home-building Brexit slump: construction of new private housing in London falls to lowest level for seven years
Across the capital, building work began on just 9,043 homes in the first six months of 2019, down more than a third from 13,959 in the same period last year.
The total is little more than half the level recorded in the peak year of 2015 and is the worst since 2012 when funding for housebuilding started to recover from the turmoil of the banking crisis.
Developers said a huge drain of confidence caused by the threat of a hard Brexit — as well as falling prices, higher taxes, and increased planning demands from councils and the Mayor — was behind the sudden slowdown.
One said: “Investors have already seen prices down 15 to 20 per cent but they are saying to the people selling property, ‘Why do I need to rush if you guys have a hard Brexit hanging over you and I will be able to buy even cheaper in a few months’ time?’”
The figures, revealed in the latest quarterly report from respected analysts Molior, show that the slump which began three years ago has spread to almost all corners of the capital.
In zone one there were just 1,130 houses begun between January and June, 66 per cent below the peak level of 2015.
The fall was even bigger in zone two, with just 1,195 starts, down 77 per cent from 2015.
How the Help to Buy scheme works in London
There was also a smaller fall in zones three to six which previously had supported higher levels of building, largely as a result of the “turbo-charge” effect of the Government’s Help to Buy scheme which allows young purchasers to borrow up to 40 per cent on new-build properties.
The Molior study covers all 708 housing developments across London with at least 20 private homes.
The GLA’s London Plan has calculated that the capital needs 66,000 new homes a year to meet the needs of its growing population and tackle the housing crisis.
Historically, around three-quarters of the homes built in London have been delivered by private developers.
Conservative London Assembly member Andrew Boff said: “This report’s findings will leave Londoners in no doubt that Sadiq Khan has failed to deliver the new homes that Londoners are crying out for.”
James Murray, deputy mayor for housing and residential development, said: “We are building record numbers of council homes and social housing. But [the Mayor] cannot force private developers to build.”