In the last 12 months Molior London tracked just 6,325 private-sale home starts—representing only 7% of the 88,000 homes needed annually across all tenures in the capital. With 29 months of unsold supply available across the city, developers have reduced their build programmes and all but halted new starts. While supply-side challenges around viability, regulatory delays and higher finance costs are well documented, our latest research identifies a critical factor: weakening demand. The issue isn't simply building more homes—it's creating the market conditions that enable developers to sell them at rates sufficient to justify continued delivery.
Multiple factors are limiting buyer activity. First-time buyers purchasing an average-priced London home now pay £17,600 in Stamp Duty Land Tax, compared to no charge for the equivalent averaged priced home in the North-East. The buy-to-let market, which historically provided crucial liquidity, has contracted sharply—with one in five landlords responding to the JLL Landlord Survey planning to reduce their portfolios as costs and regulatory burdens mount. Meanwhile, rising service charges averaging almost £7 per square foot for moderate-amenity developments are constraining affordability calculations. The prime market faces particularly acute challenges, with inner London boroughs holding 53 months of unsold stock, rising to over ten years in Kensington and Chelsea. Sales of new flats above £2 million fell 76% in 2025 versus the 2016-2024 average. It's clear that we need a new approach. Our latest London New Homes Report quantifies the scale of demand-side constraints and looks at potential policy interventions, including the impact of targeted stamp duty relief for new homes that could materially improve sales rates and unlock stalled developments across the capital.
