Latest News Wed, Jul 3, 2024 5:42 AM
New homes planning activity remains muted in London, with the rolling annual number of new applications submitted, permissions granted, and construction starts now more than 60% below their peaks of 2015.
CBRE’s latest London New Build Market Report forecasts an annual average of 33,500 homes to be delivered over the next three years. Based on the current London Plan housing target of 52,500 per year, this would result in a potential shortfall of around 57,000 homes between 2024 – 2026.
Planning permissions granted fell 30% year-on-year as at Q1 2024, reflecting just 18,999 homes, while applications were down 11%. Completions were also down, with 15,012 homes coming to market, marking a 20% decrease over the same period. Furthermore, Q1 2024 construction starts fell 17% year-on-year to just under 51,000 homes. These are the lowest construction volumes seen since 2015.
CBRE’s report points to the forthcoming second staircase regulations* as already having an impact on London’s housing delivery. As a result, many developments are having to revisit planning applications to redesign tower blocks impacted by the new rules.
Scott Cabot, Head of UK Residential Research, CBRE, said: “The latest data shows that London’s new homes pipeline continues to shrink as developers grapple with several challenges. This doesn’t bode well for future supply, and we’re now forecasting a total shortfall of almost 60,000 homes relative to the London Plan target over the next three years.
“On a more positive note, we’ve seen a notable rise in demand for development sites in London at the start of the year, reflecting improved sentiment in the residential market.”
Julien Mills, Head of New Homes at CBRE said: “The impending second stairwell regulation has had a tangible effect, and there are estimations that around 38,000 homes have been held up in planning because of uncertainty around the regulation. To put this into context, this represents around one year’s worth of housing supply.”
“Despite these figures, there are reasons for us to be optimistic. We’ve seen an uptick in land transactions this year, which points to future supply, and we’re seeing a more active domestic market, which will hopefully give developers confidence to pursue opportunities in a market that is still undersupplied.”
The number of UK-based buyers of new homes were at its highest proportion of sales in an individual quarter in Q1 2024. Domestic buyers accounted for 18% of sales in the top-selling new build schemes**, up from 4% in 2022 and 8% in 2023.
CBRE is forecasting London new build sales in 2024 to remain at a similar level to 2023, at circa 8,700 homes. Thereafter, a combination of a pricing correction and lower interest rates will lead to a recovery in sales volumes. CBRE expects a 26% increase in sales in 2025 to 11,000 homes, and an 18% increase in 2026 as sales volumes return to the long-term average.
Featured News
The Housing Ombudsman has said the Grenfell Tower Inquiry report’s findings will...
The damning final report of the Grenfell Inquiry has shown the need for competence...
BUILDING PRODUCT LIBRARY - LATEST BROCHURES
Novantica - Cement F...
By Fassa Bortolo
Fassatherm System -...
By Fassa Bortolo
Fassarend System - P...
By Fassa Bortolo
Fassalime System - P...
By Fassa Bortolo
Sport England’s Perf...
By Passivent
BUILDING PRODUCT DIRECTORY - LATEST PRODUCTS
Straightcurve® – headquartered in Australia, is renowned for high-end innovative garden edging,...
The Kingspan RLG600 raised access floor panel is intended for light office use and is capable of...
Kingspan RHG600 Simploc is the heavy grade floor system, capable of handling up to a 12kN/m2...
CONSTRUCTION VIDEOS - LATEST VIDEOS
Portakabin | Installation at the iconic Admiralty Arch, London
Straightcurve® Product Range Overview - A Demonstration of Installation Ease