London (Parliament Politics Magazine) – London housebuilding with multiple projects halted, putting Labour’s targets at risk due to soaring costs, contractor issues, and low buyer demand.
As reported by The Telegraph, dozens of London new-build projects have been abandoned, raising worries that the government may miss its housing targets.
London faces a construction slump as sites are boarded up, recalling the financial crisis.
What did Molior Consultancy’s report say about London’s housing slump?
A Molior Consultancy report found that one in six London housing projects, including developments with more than 20 homes, have stopped construction. It suggests the developments would have added as many as 5,400 homes.
The housebuilding sector faces weak demand due to inflation and rising costs, creating a perfect storm, experts say. They warned that stalled construction was “devastating” and showed Labour has failed to meet housing targets.
It follows reports that Housing Secretary Steve Reed and London Mayor Sadiq Khan plan “emergency” steps to revive stalled housebuilding.
Brent’s Heron House casts a shadow over the street, padlocked and overgrown, while a lone sign reading “supported by the Mayor of London” marks the halted work.
Molior Consultancy said the 40-home affordable housing project has made no progress since 2022, staying fully covered in white tarpaulin.
Afrex House, near Wembley, remains abandoned, with plants breaking through the site’s barriers.
UK property sales are expected to fall this year, hitting lows not seen since the 2008 crash, after previously climbing above 20,000 a year until 2022, while the Molior reports UK property sales set to drop below 10,000 this year.
During 2015-2020, London saw 60,000-65,000 homes under construction for sale or rent at any time. The number of homes under construction in London is set to drop to 15,000–20,000 by 2027.
What did Ben Walden-Jones say about London’s housing crisis?
JLL’s Ben Walden-Jones, head of residential, said London’s housing market is in its worst state since 2008. He called work on the firm’s developments a “trickle” following a “death by a thousand cuts.”
Mr Walden-Jones said,
“Whereas we usually would have at least two launches a month in London, we now only get about one launch every two months. It’s as low as five schemes a year coming through.”
He added,
“It’s a trickle. And the number of sales that we’re doing has just collapsed. Our competitors are in the same boat. No one is having any better luck, really.”
What did the Centre for Policy Studies say about London’s housing slump?
Robert Colvile from the Centre for Policy Studies think tank stated,
“His plans were stuffed with loads of things that developers could just about cope with in an environment where housebuilding was absolutely booming and they were making huge amounts of money.”
He said,
“But that’s not the world we’re living in any more. There’s a really simple lesson: the only way you can get builders to build is if they can make money by building. A lot of people on the Left are hugely uncomfortable with that.”
Mr Colvile stated,
“They and many others have been taken aback by the sheer scale of the housing shortfall in London.”
The Centre for Policy Studies said London’s housing slowdown was caused by Mayor Khan’s development plan, strict affordable housing rules, and post-Grenfell safety regulations.
When asked if Labour’s proposed reversals could revive the sector, Colville replied,
“I don’t think it’s enough.”
He added,
“Each of these was the straw that broke the camel’s back. The camel’s back is now broken, so taking off the straws isn’t going to do all that much.”
What did Tim Craine say about London’s stalled housebuilding?
Tim Craine, director of Molior Consultancy, stated,
“The key thing with development is that it’s risky. Anything can go wrong, and something usually does. But up until a decade ago, rising selling prices solved any problem.”
He said,
“When selling prices stopped rising because of the end of quantitative easing, that left everyone quite exposed to shocks. Then, when you add the recent massive build cost inflation, you end up with all these stopped sites and contractors gone bust.”
Mr Craine stated that Labour’s manifesto pledges were “never realistic”, saying,
“They were always impossible targets set by people who don’t know how the world works.
He said,
“If you went into a boardroom in any business and made the statements they’ve made, you’d have the door shut on you, and no one would pay them any attention.”
Mr Craine added,
“It’s drastic. It’s devastating. It’s devastating that homes aren’t being built for rent. The country needs landlords so that young people can live somewhere of their choice, and that choice is disappearing rapidly.”
What did Labour MPs say about London’s housing crisis and affordability?
Florence Eshalomi, the Labour chair of the housing select committee, stated,
“Solving the housing crisis relies not just on how many new homes we build, but also on their affordability. One of the main drivers of the crisis we are in has been the failure over many decades to build homes that are within reach of local people.”
She said,
“This problem has been particularly acute in London, where all too often we have seen developers prioritise profitable luxury units over housing that meets the needs of people already living here.”
Ms Eshalomi added,
“We must break with the failed status quo and build affordable homes that meet the needs of our communities.”
Stella Creasy, the Labour MP for Walthamstow, stated,
“Walthamstow has been struggling with the impact of development for years – whether in housing or in the increase in rents it causes by driving gentrification – as housing costs are the reason we have such high levels of poverty.”
She added,
“We desperately need genuinely affordable housing and protections for tenants – I hope the mayor will hold firm that these targets matter.”
Another MP said,
“We understand there is a crisis in London housebuilding, but there must be a way to solve it which does not involve letting developers get away without decent levels of affordable housing.”
How are developers addressing stalled London housing projects?
Octavia confirmed Afrex House construction halted in 2023 due to contractor insolvency. It admitted the development looks unsightly, but the site remains secure while plans for its future are reviewed.
Suzannah Taylor of PA Housing said construction at Heron House has been stalled since 2022 due to “the insolvency of the original contractor commissioned to construct the project.”
She added,
“We are working to appoint a new contractor to complete the scheme and deliver these affordable homes.”
What did the government say about boosting London’s affordable housing?
A government spokesman stated,
“We’ve already increased London’s funding for affordable homes, but with so many Londoners stuck in temporary accommodation or on housing waiting lists, we must look at every lever to tackle the emergency we’ve inherited.”
They said,
“That’s why we are working with the Mayor on getting the capital building again, including the social and affordable homes Londoners desperately need. No decisions have been made on affordable housing requirements in London,” adding, “Housebuilding in London is clearly in crisis. Since 2020 the number of homes under construction for private sale or rent at any one time has fallen by a third, to around 40,000 today – and just over 3,000 affordable homes were started across the city in 2023-24.”
What did the Mayor say about tackling London’s housebuilding crisis?
A spokesman for the London Mayor said Sadiq Khan is
“working with the Housing Secretary on a package of reforms to boost housebuilding in the capital.”
He added,
“The disastrous legacy and underfunding from the last government led to record construction costs, high interest rates, and lengthy delays from the Building Safety Regulator, which created a perfect storm leaving the capital facing the worst conditions for housebuilding in decades.”
What is the UK government’s housing target?
The Labour plans to deliver 1.5 million new homes in England over the course of the current parliament, which ends in 2029
The government has estimated that London needs 88,000 new homes each year to meet its housing needs. However, reports suggest a lower annual figure of 40,000 new homes is needed to keep up with demand.
As of September 2025, the government’s data reveals that 231,300 net additional homes have been delivered in England since the start of the parliament in July 2024.
