By: Costas Pitas
LONDON: The number of new homes built in London will reach 46,500 this year but total completions will fall by a quarter at the turn of the decade, estate agents Savills said on Tuesday, in a further blow to efforts to tackle a mounting housing crisis.
The government has set out plans to boost house builds in England from 190,000 homes a year to at least 250,000 in a bid to tackle a chronic lack of supply, especially in London, which has made buying unaffordable to many and pushed up rents.
But Savills said on Tuesday that, after reaching a recent high in 2017, only 34,700 new homes will be completed in 2021, becoming the latest property firm to forecast a drop.
“Over the next few years, private sector completions are forecast to fall sharply, the result of rapidly falling home starts, as developers adjust to lower rates of sale,” Savills said in a release.
Total sales in London fell 21 percent in 2016 compared to the previous year to 82,172 transactions, according to official data analysed by residential fund the London Central Portfolio, although prices continued to rise.
Developers have been particularly put off from building in the priciest areas in the centre of the capital, including places such as Kensington and Westminster, where sales fell by nearly 30 percent last year, hit by increased taxes and the Brexit vote.
Britain’s biggest builder Barratt is among those to scale back building in the capital, saying in February it would build around 20 percent fewer homes partly due to rising land prices.
In February, the National House-Building Council said a closely watched indicator of future supply dropped a third, partly due to the initial impact of the EU referendum.
Europeans are the majority of construction workers on several sites in the capital and any Brexit-imposed curbs on immigration could further curtail building and push up costs. (Editing by Michael Holden)
Source: Reuters