Thousands of homes under construction have been left abandoned at stalled “ghost housing developments” across London as a result of last year’s sudden downturn in the property market, the Standard has learned.
At the year end, construction work at 61 house-building sites where at least 20 homes are due to be completed had been halted with the gates padlocked. Together they accounted for just over 6,000 half-built homes at a time of severe housing shortages across London.
Industry experts say the number of schemes on hold is unprecedented in recent history, apart from the early months of the first pandemic lockdown. By contrast, in the wake of the financial crisis in 2008 and 2009 only 10 schemes were put on hold.
Developers blame a “perfect storm” of setbacks. They include the dramatic spike in interest rates after Liz Truss’s mini-Budget in September 2022 that sent demand for new homes plummeting and prices falling, the collapse of a number of major building contractors in 2023, soaring costs that have made some schemes unviable and new safety and environmental building regulations from the Government that have forced builders to redesign their plans.
In total, 24 out of London’s 32 boroughs had at least one halted construction site. Croydon had the most mothballed projects — 12 — representing 841 homes. Tower Hamlets had the highest number of homes on hold, a total of 1,684 at four sites.
The figures were compiled by data analysts Molior. Founder and director Tim Craine said: “We were surprised to see just how many sites there were across London where no work was being done. That is different to the situation after the financial crisis and different to the situation in the rest of the country.”
At one stalled scheme, developer St Modwen’s The Square at St Andrew’s Park in Uxbridge, work started in early 2022 but was halted last summer with no signs of progress on the 294 partially built homes since then. St Modwen is planning to relaunch the scheme and work will recommence if there is demand for the homes from people prepared to buy off-plan.
A spokesman said: “We are currently undergoing a strategic review of The Square at St Andrews Park. While that happens works have been temporarily paused which we will provide an update on in due course.”
Molior’s report on the London private housebuilding sector in 2023 also reveals devastating falls in the number of starts, completions and sales last year. Starts were down 47 per cent compared with the 10-year average at 12,083, completions were 32 per cent lower than the benchmark at 13,501, while sales were 38 per cent lower at 13,501.
The boss of one London housebuilder told the Standard: “I have never seen so many stopped building sites in London. The economics of these sites don’t make any sense. It’s not just the state of the market. There is so much regulatory uncertainty over issues such as second staircases and heat pumps. The whole system is clogged up.”
