UK housing crisis: London boroughs fail to build

More than two-thirds of London boroughs have failed to commence a single residential development in the first quarter of 2025. According to JLL analysis of Molior data, just 1,210 new homes broke ground across the capital between January and March, marking the lowest quarterly total since the 2009 financial crisis. At the current pace, London is on track to deliver only 5.5% of the government’s annual housing target of 88,000 homes. The figures lay bare a looming supply cliff. Of the 45,000 private homes currently under construction, over 31,000 are forecast to complete by 2026. But beyond that, the pipeline rapidly thins. Just 7,400 completions are anticipated in 2027 and 2028, of which 45% has already been pre-sold. Additionally, 16 London boroughs have no completions scheduled in that timeframe. A national slowdown London’s slowdown reflects wider trends. JLL recently reported a 20% drop in the volume of multifamily build-to-rent homes under construction across the UK, signalling mounting pressures on delivery nationwide. The sector faced a plethora of challenges, including volatile capital markets, rent controls in Scotland, a surprise general election, build cost inflation, elevated debt costs, mounting regulatory issues and more, as Estates Gazette explored earlier this year. At the time, Jean-Marc Vandevivere, chief executive at developer and operator Platform, said: “There is no doubt the volatility of capital markets, the uncertainty from the Renters’ Reform Bill, the under-resourced Building Safety Act gateway process and ongoing discussion of rent controls in Scotland mean we are all trying to drive forward with the handbrake on. We’re continuing the relevant discussions to ensure these policies provide the right balance of controls and benefits for residents, landlords and developers.” Signs of optimism beyond the cities Outside urban centres, however, sentiment is beginning to shift. Planning reforms, particularly Labour’s move to reinstate mandatory housing targets and loosen greenbelt restrictions have reignited confidence, especially among major housebuilders. Additional government funding for local planning departments and the hiring of new officers is expected to help address longstanding resourcing bottlenecks. This is already reflected in developer sentiment: in JLL’s Q1 survey of over 50 volume and SME housebuilders, only 60% cited planning delays as a key drag on activity the lowest share since the survey began in 2020. The government’s evolving stance on ‘grey belt’ has also attracted significant developer interest. Over 70% of survey respondents are either considering or actively pursuing applications on grey belt land, and 60% are exploring permissions on non-allocated sites, suggesting renewed willingness to test the system where local housing shortfalls are severe. Cities still critical to national growth While a pivot toward greenfield development may help boost delivery, JLL warns that sidelining urban housing risks undermining long-term economic productivity. Cities remain the UK’s primary engines of growth, and without a more radical overhaul of urban planning frameworks, the government is unlikely to hit its ambition of delivering 1.5m homes over this Parliament. Gateway 2, in particular, is fast becoming a critical chokepoint. The principle behind the system is widely supported, but poor execution and insufficient resourcing are forcing developers to reassess tall building strategies, often adjusting land values and timelines to account for uncertainty. With many local authorities missing their housing delivery targets, the opportunity for speculative applications is growing. But unless systemic issues are addressed, especially in London, the UK’s housing crisis risks deepening.