London new home starts plunge 38% as Building Safety Act bites
London new home starts plunge 38% as Building Safety Act bites
New home registrations in London have slumped 38% as the capital becomes the only UK region to record a sharp fall in new housing starts.
The figures from warranty provider NHBC highlight how the new building safety regime is stalling high-rise projects in the capital, with developers facing delays under the new Gateway 2 approval process run by the Building Safety Regulator.
While the rest of the country saw strong growth, London starts dived as tighter rules and slow approvals hit confidence in the apartment sector. The drop in London dragged national apartment registrations down 3% year-on-year.
London output stricken by Gateway 2 delays and focus on affordable home upgrades
Across the UK, developers registered 29,356 new homes to be built in Q1 2025 – a 36% jump on the same period last year.
NHBC said the improved registrations were being fuelled by improving mortgage rates, lower inflation, and government promises of planning reform and infrastructure investment.
Private housebuilders led the way with a 62% surge in registrations, especially for low-rise homes. Detached house starts were up 63% and bungalows rose 54% as developers shifted focus away from flats.
Apartment building sinks to lowest level seen
NHBC chief executive Steve Wood said: “Although we can be distracted by global factors that continue to unsettle markets, the easing of inflation, lower mortgage rates, greater availability of lower deposit mortgages and a strong start to spring sales all point to improving prospects in UK house building.
“This is particularly true for low-rise housing and for regions outside London which are less affected by the delays in approvals from the Building Safety Regulator where the new gateway system is still bedding in.
Housing association activity in the capital also dipped, with many focusing budgets on maintaining and upgrading existing stock rather than starting new builds.
Despite London’s woes, completions across the UK held steady at 26,120 – just 1% down on last year – and NHBC said growing confidence should feed through to improved housing supply over time.
The latest NHBC figures coincide with research from the G15 group of large housing associations in London.
They warn there has been a catastrophic 66% drop the number of new affordable homes being built in the last two years.
The G15 is now calling for swift action in the face of a deepening housing crisis.
According to its findings, just 4,708 new home builds started in 2024–25, down from 13,744 two years earlier.
The G15 is calling for full access to the Building Safety Fund for housing associations ensuring parity with private sector landlords for vital safety works and a 10-year rent settlement to provide long-term certainty for planning and investment.
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