London development report – new homes sales rise 1% in 2020
Sales remain resilient with pricing supported by more limited supply in the aftermath of the pandemic
2 minutes to read
- Last year, new homes sales rose 1% to 20,092 compared to 19,842 in 2019
- The number of units that started construction in 2020 was 17,856, down 9% on year, and 47% below the 2015 peak
London new homes sales remained resilient during 2020, with strong demand outpacing supply.
In a new report on the London residential development market, we look at the market drivers of the new homes market and the city’s prospects for economic growth over the next five years.
New data from Molior, which includes projects of 20 or more private units, shows new homes sales increased 1% in 2020, with the sales total for the third quarter of 2020 almost matching the pre-Covid-19 Q1 2020 figure.
In total, 5,918, new homes were sold across London during Q3 2020 – compared to 6,132 during Q1 2020 and a quarterly average of 4,950 during 2019. In Q4, sales fell 29% on quarter to 4,190.
Pricing in the new homes market is likely to be supported by more limited supply in the aftermath of the pandemic, with the building hiatus during the first lockdown set to impact delivery as firms catch up after construction halts, supply chain disruptions and risks to their labour force.
Molior data shows the number of units that started construction in 2020 fell 9% on year to 17,856. In inner London, new starts dropped 24%, while outer London starts were more stable, dipping just 2% on year.
There was also a decline in the number of residential units entered for planning permission last year in projects of 20+ private units. This number amounted to 29,431 for 2020, down 20% from 36,723 in 2019.
Meanwhile, the number of units granted permission in large schemes in 2020 was well below the 2015 peak of 48,242 standing at 25,709.