Knight Frank has released its London Residential Development Report (H1 2019), which revealed that house prices declined 0.6% in the capital in 2018, but markets are increasingly localised and performance differs greatly by borough.
There were 20% fewer dwellings added to London’s housing stock during 2017-18, though delivery remains well above the pre-crisis average. However, the construction and planning pipeline suggests delivery may fall further.
Of most concern was the fact that just five of London’s 33 boroughs met their targets for housing need during 2017-18 and twenty delivered less than half their targets.
Patrick Gower, residential research associate at Knight Frank, commented: “The market faces structural challenges that are suppressing long term sales activity, including stretched affordability, tighter mortgage regulations introduced in the wake of the financial crisis, and patchy house price growth. These factors, and a challenging policy environment, have also weighed on residential construction. Upward momentum in annual housing delivery that had continued unabated since 2012-13, reversed in 2017-18, with the number of dwellings added to total housing stock in the capital, including conversions and change of use, falling 20% compared with the previous year.”