London new home starts slump 59% as safety regime bites

London new home starts slump 59% as safety regime bites
New home registrations have slumped by 59% in London, dragging on otherwise modest UK-wide growth in house building during the second quarter of 2025.
Fresh figures from the NHBC show registrations across the UK rose 4% in Q2 compared to a year earlier.
But this masked sharp regional contrasts, with the capital suffering a 59% fall as developers and housing associations wrestle with delays linked to the Building Safety Regulator and tightening social housing budgets.
The UK’s largest warranty provider said a total of 30,405 new homes were registered in Q2 2025, up from 29,103 in the same period last year and slightly above Q1’s total.
But London was the standout laggard, recording the steepest drop of any region to 904 homes as the post-Grenfell high-rise safety regime continues to dent delivery and confidence in high-rise schemes.
The other big regional high rise market North West and Merseyside was down 18% at just over 2000 homes.
New flats registrations across the UK were down 23% year-on-year, with the NHBC pointing to a clear shift in developer focus towards low-rise homes. Terraced house registrations jumped 33%, while detached and semi-detached homes also saw gains of 7% and 5% respectively.
The rental and affordable sector saw just a 1% annual rise, with 9,481 homes registered in Q2.
Quarter-on-quarter growth was more promising at 6%, driven partly by fresh optimism from the Chancellor’s recent £39bn pledge for social and affordable housing over the next decade.
Steve Wood, NHBC chief executive, said: “While some areas of the market remain subdued, we remain optimistic about the longer-term as planning and land restraints are increasingly unblocked, mortgage rates ease and the Government sustains a focus on new home delivery.”
Outside of London, several regions saw strong registration growth, including Yorkshire and Humberside (+96%), the South West (+75%) and Northern Ireland (+44%).
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