London needs 52,000 homes built per year
The CBRE has reported there are currently around 300,000 residential units in the capital’s planning pipeline.
But with London’s population set to increase by 14%, more than 1 million people, over the next decade, the capital is unlikely to reach the level of housing required.
CBRE calculates that there is a problematic imbalance between planned property supply and demand, with pipeline properties set to satisfy just two thirds of the estimated level of future demand for housing.
During the past 20 years, London has built an average of 17,350 homes per year, well below the 42,000 target which was recently unveiled as part of the Homes for London publication by the Mayor of London.
The findings revealed by CBRE demonstrates that 52,000 new homes will need to be built in London each year, 10,000 more than the revised target, and well below the number of units built in 2012, which was approximately half this level.
Jennet Siebrits, head of residential research at CBRE, said:
“Over the past decade London’s population has increased by around 800,000, however only 200,000 new homes have been built. Out of 33 London boroughs, only seven currently have enough stock in the development pipeline to satisfy the projected growth in households over the next 10 years.
“The Inner London market has been particularly attractive during 2013, as mortgage constraints are less of an issue, and the demand from overseas investors into Prime Central London remains strong. As a result, many developers are focusing in this area. Currently, 14 Inner London boroughs have accounted for 56% of all new residential construction starts, with over 1,800 new build units sold in 2013 to Hong Kong and Singapore buyers alone.
“During recent years, the role of housing associations in building private homes has become increasingly important, the g15 now accounts for one quarter of all new building works. The organisation which represents London’s largest 15 housing associations currently controls over 15,000 market units, split between sites at planning stage, those with consent and those under construction.”
Mark Collins, chairman of residential at CBRE, said:
“Since 2010, several house builders have developed their market share, and contributed to building a wide range of brand new residential offering right across the Capital. The Berkeley Group, Barratt Homes and Bellway have together successfully accounted for over 16,000 new build starts, a third of all private housing inside the M25.
“While finding the land to develop remains increasingly difficult for today’s developer, house builders remain very active, and during recent years the emergence of Inner London key development hotspots, including Stratford, Earls Court, Elephant and Castle and Vauxhall Nine Elms and Battersea (VNEB) have all attracted significant international investment.
“The rise of global developers entering the market also reinforces the continued appetite and confidence in the financial capital, with Malaysian, Chinese, Singaporean and Middle Eastern companies having consent for 33,000 residential units in London.”