Capital leaving the London housing market not due to a lack of housing demand but from a “failure to deliver”, ASK Partners head of origination, Joe Freedman, has suggested.

Detailing the current state of the London housing market, Freedman pointed to research from Molior which found just 5,547 private homes broke ground across the capital last year, a 84 per cent drop when compared to a decade ago.

Against an annual requirement of roughly 88,000 homes, development has slowed to a trickle.

Even with the modest uptick in starts that took place at the end of last year, Freedman said the pipeline remains “deeply inadequate”.

He explained that Molior expects around 14,000 homes to complete in 2027 and 2028 combined, a more than 90 per cent shortfall.

However, despite these development struggles, Freedman pointed out that capital has not completely abandoned London and, at the top end, activity is returning.

Prime and super-prime London property increasingly looks attractive on the global stage as the capital still offers political stability, legal security, global connectivity, and cultural pull.

“Tax changes and softer pricing have reset expectations rather than killed demand, narrowing the gap between buyers and sellers and bringing liquidity back to best-in-class stock,” he said.

“Volume-led, mid-market schemes remain hardest to finance, while scarce, high-quality assets in prime locations continue to transact. Confidence in London itself remains intact. What’s changed is how risk is priced.”

He added that capital is “selective not scarce” in the London market with lenders and investors focusing on experienced sponsors, clear demand, and strong locations.

Freedman additionally stated the collapse in housing starts should be a “wake-up” call for policymakers.

“The government has put housebuilding at the centre of its growth agenda, yet London is on course to miss its targets by a wide margin,” he said.

“Ambitious targets are meaningless without practical delivery: faster, more consistent planning decisions, regulatory clarity, and policy frameworks aligned with today’s build costs.”

He added that, while recent improvements barely dent the shortfall, London still has a long way to go before supply and demand are close to balance.

tom.dunstan@ft.com

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