London’s housing market is facing a paradox: just as the need for new homes reaches its peak, both building and buying are stalling. First-time buyer demand has fallen sharply, with Zoopla reporting a 12% drop since last year, while construction output is shrinking at its fastest pace since 2019. Affordability pressures are keeping aspiring homeowners off the ladder, and without buyers, developers have neither the confidence nor the economic rationale to get building again.
The Government and GLA have recently announced new measures to kickstart housing delivery in the capital by boosting viability, which from a supply-side perspective is a step in the right direction, but this addresses only half the challenge. Boosting supply is impossible without strengthening demand, and restoring first-time buyer confidence is essential if London is to see homes delivered at the pace it needs.
