According to analysis by London property firm Stirling Ackroyd councils across London granted planning permission for just 4,320 homes in the first three months of 2016, a drop of 64% on the same period of 2015.
It is estimated that if London is going to keep up with demand for housing, 50,000 new homes need to be built annually. The problem is if the year progresses at the same rate as the first quarter of this year, less than 17,500 new properties will be planned. Stirling Ackroyd's analysis found that London boroughs are currently rejecting 4 out of 10 possible new homes compared with 2 in 10 during the first quarter of 2015. The number of applications from developers has also dropped, this time from 14,400 during the first quarter of 2015, to 7050 between January and April 2016.
Blame for the slowdown has been laid squarely at 3 doors; estate agents and developers have cited citing the EU referendum, the run up to the recent mayoral election and the increase in stamp duty on additional residential property purchases as the reasons for falling demand from buyers.
The fact the London mayoral candidates have, on the surface at least, expressed a commitment to building more homes has been countered by Stirling Ackroyd’smanaging director, Andrew Bridges. Mr Bridges said that London was experiencing a planning “blockage” which would not be overcome unless planning officials took more direct action:
“...the most frustrating side to the slow pace of planning departments is that London has the drive, capacity and ability to take control of its housing problems. There’s no easy fix, and building alone isn’t sufficient to get people on the home ownership ladder. But enough new homes are a necessary starting point that is still so far away from reality.”