A study conducted by international property adviser Savills has found that the number of new homes in London is set to reach record level in 2017. However, it will be still short of the demand for housing in Europe’s financial capital.
The total number of net completions (including sub-market and intermediate housing provision) are expected to reach a high of 46,500 this year, ahead of the minimum 42,000 homes a year target set by the London Plan. But the number is well short of the real housing demand, which Savills estimates at 64,000 homes per year, Savills said in a statement.
Market indicators suggested that 41,000 homes were completed in 2016 in London. Interestingly, over the past five years, the role of private housebuilders has been significant in the London property market. According to Savills, private house building starts raced ahead of completions, supported in large part by rising volumes of off-plan sales, which assist cash flow and give certainty to funders and are therefore vital to the current delivery model.
To an extent, the fact that London almost reached its official new homes target last year should be seen as a massive success. “But these figures suggest we are at the limit of what can be built under the current delivery model,” Savills cautioned underscoring the need for better housing delivery models.
Total net completions (including sub-market and intermediate housing provision) are expected to peak at 46,500 this year, ahead of the minimum 42,000 homes a year target set by the London Plan