Under the “London Plan”, inspired by Boris Johnson when he was Mayor, the serious shortage of residential stock in London was addressed with a programme to add 42,000 new homes per year to the Capital City’s accommodation problems. Over the past 5 years only 60% of this figure has been achieved with only some 25,000 homes a year being built. This year it looks unlikely that even 10% of that target can be reached.
Now an even larger problem is emerging. The Financial Times reported that “Homebuilders in the UK are collapsing at an accelerating rate, threatening the much-needed supply line”.
368 companies filed for insolvency in this sector last year, compared with 207 in 2016.
Invariably it is the small builders who are filing for insolvency and it looks like we will see record insolvencies this year in the sector.
As builders come back to sites and renew marketing efforts, it looks like less and less stock will be available in the market by the end of this year because the halt in business in the first and second quarter also damaged stock levels.
Inevitably as current stock gets taken up in the third and fourth quarters of 2020, the shortage will cause prices to rise and as inflation bites to counter the Governments unprecedented spending, we will start to see sharper rises in property prices in the Capital city.
Share this article