Sales of new build homes in London have plummeted, according to new research.
According to property consultancy Molior, a total of 5,606 new builds were sold in the first six months of the year in the capital, compared to 8,840 in the same period last year, marking a fall of almost 37 per cent.
This is a stark contrast to 2022 when 20,280 new builds changed hands in London.
Data from Land Registry shows that some months, such as February saw just two new build properties sold in London, compared to 4,189 existing properties.
The research by Molior also shows that a record 4,629 new build properties remain unsold in the three months to June, representing an estimated £3.5 billion of housing stock.
Molior said this is the highest level it has ever seen.
Historically, sales of new build properties have averaged around 1,000 a month, according to Land Registry records, stretching back to 1995.
Many developments are now being halted as demand for new builds in London wanes.
Some 56 developments have been put on pause, with 3,913 homes now mid-completion, according to Molior.
The problem is only set to intensify as 70 per cent of current homes under construction will complete by the end of 2027. This leaves just 8,750 homes forecast to be on site in January 2028.
As well as demand collapsing, rising construction costs have been one of the primary contributors to the plummet of new build house sales.
However, even after the recession that followed the financial crisis, new build sales never fell below the 369 recorded in February 2011.
As reported by This is Money, a source claimed the cost of building a home in London has increased by 75 per cent since 2016.
They explained the cost of building a typical two-bed flat of 70 square metres has gone from £245,000 in 2016 to around £430,000 today.
British homebuyers have also disappeared from the London market, with only 3,320 new builds being bought by British owner-occupiers in 2025. This included first-time buyers and home movers.
Jeremy Matallah, co-founder of rent-to-buy scheme Keyzy, says that, aside from leasehold issues, buying a home has become too expensive.
He says: “For many first-time buyers, the biggest obstacle is saving for a deposit while paying London’s sky-high rents.
“Every day we speak to people who can afford the monthly cost of homeownership but can’t raise the deposit.
“With sales to UK individuals having reduced by almost 40 per cent in two years, it’s clear how difficult it has become for ordinary Londoners to buy.”
The appetite for new build homes in London has largely been driven by companies, with individuals accounting for just one in five new build sales in the capital.
London Square has just over 5 per cent of the market share, while Berkeley Group is building 16 per cent of London’s private homes. Vistry Group has just under 5 per cent market share.
Tim Craine, director at Molior, said: “Many investors are selling properties acquired five to 15 years ago, often at prices 20 per cent below comparable new-build homes.”
“Today in Canary Wharf, for example, about 1,000 second-hand new-build apartments are for sale. This excess competition suppresses market prices and discourages new development from commencing.”
Andrew Pemberton, chartered building engineer and senior manager of surveying at the Professional Snagging Company, added: “It’s not one issue driving London’s housing market. Affordability continues to cool demand, but buyer confidence in new-build quality remains fragile.
“We’re seeing some of the best quality homes we’ve inspected, yet there’s still huge inconsistency, even between phases of the same development. Add in rising construction costs, which have forced many builders to slow delivery, and it’s easy to see why the market has lost momentum.”
