New data from the National House Building Council has revealed the number of new home registrations in London fell by a third
New home registrations in London have fallen by a third. According to the data the number of new homes built in the capital fell six per cent last year, and a closely watched indicator of future supply declined by a third.
Registrations with the National House Building Council (NHBC) dropped to 33 per cent, hitting 17,322 units in 2016.
The London market saw registrations increase marginally in the first four months of 2016, but in the period before the EU Referendum vote and between May and July figures slumped by over 60 per cent.
A number of factors behind the slump
Business Development Director Mark Jones said the London market was caught up by factors such as “the timings of the registrations and the build coming through including the impact of Brexit in those early months.”
One reason for the slump was cited as the rising cost of land. Housebuilder Barratt said it had built nearly 60 per cent fewer homes in the capital during the second half of the year because of this. Furthermore, the group said it had cut the price of top-end homes in central London by up to 10 per cent as demand in the area slowed due to rising costs of things such as stamp duty.
There was a six per cent reduction in the number of new homes built in the capital, falling to 21,464. Nationwide this figure rose by 0.5 per cent to 141,175 units.
Immigration changes could cause further issues
Concerns have also be raised about the future of the construction sector, with many housebuilders fearing future growth could be curtailed by immigration changes due to Brexit. The industry, in particular in London, relies on European workers on building sites.
While Prime Minister Theresa May has suggested there will be immigration controls in place post-Brexit there has not yet been any specific details released about what these measures would look like.
Peter Andrew, deputy chairman of the Home Builders Federation said: “Our lobbying is all about ensuring that we are at the top of the agenda when it comes to immigrant labour.
“If we’re to get the increases in output that the government is looking for, we are going to need the labour we’ve got now plus the labour required to build the increases,” he said.
