A staggering 84% decline in housebuilding in London's private sector has been revealed, highlighting a critical housing shortage in the capital. This crisis, which has seen construction plummet from 33,782 new homes in 2015 to a mere 5,547 in 2025, is having devastating effects on Londoners.
Lord Bailey, a member of the London Assembly, paints a dire picture, stating that ordinary Londoners are bearing the brunt of this crisis, which has evolved from difficult to devastating. He warns that this is not just a housing issue but a crisis of stability, opportunity, and dignity.
The Mayor of London's office acknowledges the urgency, with a spokesperson stating that tackling the housing crisis is a top priority. Sadiq Khan is reportedly doing everything in his power to deliver more homes of all tenures. However, the numbers tell a different story.
Only around half of the homes currently under construction, totaling 18,326, are expected to be completed by the end of this year. A further 14,053 homes face delays, with completion dates pushed back to 2027 or later. This represents a mere 8% of the government's ambitious two-year target of 176,000 homes for London, resulting in a shortfall of 92%.
Construction work has also been halted on 5,009 homes across 51 development sites in the capital. Molior, the consulting firm behind the research, suggests that high construction costs and a weak sales market may be to blame, with some building contractors going bust or deliberately putting projects on hold.
The firm's data shows that only 8,436 new homes were sold in London during 2025, contributing to the decline in construction starts. To meet government targets, at least 22,000 homes would need to be sold each quarter.
The Mayor's office has announced initiatives to address the crisis, including encouraging housing providers to bid for a record £11.7 billion of government investment through the Mayor's Affordable Homes Programme. This will be complemented by the launch of a City Hall Developer Investment Fund, initially backed by £322 million, to support large-scale projects. Additionally, the government has confirmed its support for plans to extend the Docklands Light Railway to Thamesmead, which could unlock up to 30,000 new homes for Londoners.
Khan attributes the decline in housebuilding to a range of factors, including the previous government's legacy, high-interest rates, rising construction material costs, the impact of the pandemic, Brexit, and delays by the Building Safety Regulator.
Lord Bailey places the blame squarely on the mayor, arguing that his policies have stifled development, slowed delivery, and left Londoners paying the price through rising rents, soaring house prices, and the painful reality of being priced out of their own city.
This crisis raises important questions: How can London address its urgent housing needs? What steps can be taken to stimulate construction and make homes more affordable? Join the discussion and share your thoughts in the comments below.
