Property investment firm London Central Portfolio analysed data from LOREMA and the Land Registry and found 106,208 new units had been approved for development in 2015, a rise of 20% since 2013. Last year 17,494 new applications were received, representing a rise of 27% on 2013’s figures.
Despite this glut of new properties planned for the inner London market, research confirmed sales and prices were falling and the firm warned of a growing imbalance of supply and demand, and the knock on effect it could have on the general housing market.
The majority of new units are centred in Tower Hamlets and Battersea Nine Elms, with 33,239 and 18,665 new units planned for these areas respectively.
London Central Portfolio found that across the Battersea Nine Elms area, prices are down 8% since their 2014, even though prices across London as a whole were up by 23%.
Naomi Heaton, chief executive officer at London Central Portfolio, said: “In light of the plethora of tax hits over the last few years, possibly exacerbated by the uncertainty of Brexit, it appears foreign investors, the majority of the buyers of new developments, may finally be turning away. These properties typically sell at a significant premium, averaging 25%, over older stock. History demonstrates that a saturation of over-priced commodity-style property leads to softening prices, particularly during times of economic uncertainty.”
A spokesman for the Federation of Master Builders (FMB) said: “In terms of London as a whole, the feeling since the beginning of this year has been that things are slowing and that has continued.”
In contrast to the new applications made for new inner London units, the spokesman said its own survey for Q2 showed a very dramatic downturn in workloads in London.