London’s Homebuilding Crisis: Policy Challenges, Market Pressures and Solutions
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4) Perspective Taking
It’s important to bear in mind that large-scale private new-build development in London is a relatively recent phenomenon. According to a comprehensive database assembled by the think tank Centre for Cities, between 1955 and 1975, only around 200,000 homes were privately built in the capital, around three-quarters in Outer London boroughs, just 5.4% of the nation’s total.
To put this in context, this is slightly less than what was built in the eight-year period between 2016 and 2023 (when delivery was more evenly split between Inner and Outer London), when the capital accounted for 14.9% of private delivery.
This is, of course, private development. Social and affordable housing was a different matter. Between 1955 and 1975, London built some 300,000 affordable homes, half as many again as the private sector, or 12.4% of the UK total.
Inner London’s record is even more stark: 126,207 affordable homes and just 41,238 private homes.
Indeed, between 1974 and 1984, some 63% of all privately built London homes were delivered in just 10 boroughs: Bromley, Sutton, Barnet, Hillingdon, Bexley, Havering, Richmond, Enfield, Kingston and Harrow. Presumably, this reflects family housing on (relatively) greenfield sites.
Some London boroughs that are now deeply desirable saw extremely low delivery over that period – Tower Hamlets (just 316), Hammersmith & Fulham (just 369), Camden (just 442), and Lambeth (just 489). Hackney, Greenwich, Brent, Islington, and Wandsworth all saw fewer than 1,000 (or fewer than 100 homes per year).
This was not a period of any urban private housebuilding at scale. The industry largely built suburban homes and the odd medium-rise block of flats, while urban development was largely the province of councils. The exceptions were a few infill schemes carried out in the more affluent parts of London. In other words, there was no real at-scale urban private housing model. (The big regional cities were no different, incidentally, although many lacked infill projects too).
The following ten years – between 1985 and 1994 – were not so different. Inner London boroughs were delivering somewhat more (typically 500-1,250), but the likes of Hillingdon, Bromley, and Enfield remained the standout deliverers. There were two exceptions: Southwark and Tower Hamlets, which saw almost 10,000 and almost 6,000 private homes, respectively. This was a sign of what was to come, as it reflects the first large-scale private residential development in London since the likes of Dolphin Square before the war – the regeneration of Docklands and parts of the South Bank and Surrey Docks respectively.
The modern era of London development, though, can probably be dated back to the likes of the Montevetro scheme in Wandsworth, which was completed in 2000. It was the first large-scale luxury flatted development outside Docklands and would set the scene for a new wave of private development in London. By 1995-2015, the league table of delivery was led by Tower Hamlets and Southwark, with Westminster and Wandsworth high up in the table, a position that would continue: Inner London boroughs had become major contributors.
This was, of course, a reflection of changing attitudes towards Inner London – a so-called ‘gentrification’ that was being matched by a reversal in prices (Outer London boroughs were largely more expensive than inner ones in the decades after the war).
The history can be seen clearly in the chart below – London providing 14-18% of new builds post-war (a combination of reconstruction in Inner London and, more importantly, suburban expansion that had been approved before the modern planning system was introduced in 1947), followed by London making a 4-6% contribution to total private housebuilding in the sixties, seventies and eighties, mostly accounted for by Outer London (Inner London providing less than 2% for much of this period).
But as London’s renaissance kicked in, the figures for both rose, with Inner London in particular seeing private development of residential that had not occurred at anything like that scale for a very long time – arguably since late Victorian times.
The ‘broken model’ issue is more of a concern for Inner London. Of the 2,153 starts in London over the first six months of 2025, only 23% were in Inner London. This compares with a long-term trend of 39%. The boroughs seeing the highest number of starts in London were Barking & Dagenham, Barnet and Hounslow, where values are lower, development is less dense, easier and comprises low-rise flats or townhouses, and there is less affordability stress.
A further problem is that affordable housing delivery is now more linked to private development in a way that it was not the case in the immediate post-war period – partly because of section 106 agreements, partly because of the nature of development in London, with a majority of flatted, mixed-tenure blocks that cannot be built piecemeal.
In the mid-1970s, around 15% of affordable housing in the UK was being delivered in London; by the 2010s, this had risen to as much as a quarter. As a result of the general problems and the link with the viability of private schemes, it was probably around 2% over the year to the end of Q2 2025.
This leads to two important conclusions. Firstly, that London’s private sector has become far more important to national housing delivery. Secondly, as social housing has also become linked to that same private sector, it has become linked to market cycles and more vulnerable to downturns, like this one, that disproportionately impact private development in London. This implies that there is a need for a rethink of the whole system, rather than just some – admittedly helpful – emergency measures.
So, what are the potential solutions?
- London’s Homebuilding Crisis: Putting Things in Perspective