New build sales in London ‘dry up’, major agency warns
Marc von Grundherr at Benham & Reeves says new build transactions in the Capital now make up less than 1% of the total.
New build property sales in London have “all but dried up”, according to analysis by Benham and Reeves.
In fact, new builds made up less than 1% of transactions in the capital in the last six months, down 37%.
There were just 229 new build transactions in the half-year out of a total of 24,487, Land Registry figures show.
And in some boroughs – City of London, Barking, Haringey, Lewisham, Havering and Merton – there were no sales of new builds at all.
Bucking the trend
Newham is the only area bucking the wider trend, where new-build homes accounted for one in 10 transactions over the last six months. Brent also posted stronger levels of activity, with new builds making up 4.2% of sales, while Tower Hamlets followed at 3.5%.
Immense pressure
Marc von Grundherr, Director at Benham and Reeves (main picture), says: “The new-build sector in London has come under immense pressure over the last year.
“With developers grappling with higher material and labour costs, drawn-out planning processes, elevated interest rates and a more cautious level of buyer demand, it’s perhaps no surprise that sales volumes have dwindled,” he says.
For many buyers, the premium price of a new-build home simply isn’t justifiable in the current climate.”
“For many buyers, the premium price of a new-build home simply isn’t justifiable in the current climate when existing stock is more competitively priced, and at the same time, developers have had to scale back launches in order to weather what has been an extremely challenging market environment.
“Whilst market conditions remain challenging, it’s the rental market that continues to pick up the slack with huge demand for rental properties.
Chronic undersupply
But he says London remains a city with “chronic undersupply of housing and new builds will continue to play a central role in addressing this imbalance”.
“As confidence returns to the wider market, we expect to see greater activity within the new-build sector and a renewed appetite from both buyers and developers alike.”
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