London is completing around one new-build home for every five represented by its assessed housing need, with the annual difference amounting to more than 335,000 homes over five years if current completion levels continued.

The analysis, by development risk and insurance specialist J3 Advisory, comes as the government continues to target 1.5 million new homes by 2030.

J3 examined London’s delivery position because the capital has the largest assessed housing need in England and remains central to the national housing debate.

Rosita Mendonca, Operations & Marketing Director at J3 Advisory, said: “London’s housing challenge is not just about demand. These figures illustrate the scale of the delivery challenge if the government’s 2030 ambition is to translate into completed homes people can actually occupy.”

London’s five-year housing position

Measure

One year

Five years at the current rate

Assessed housing need

84,889

424,445

Recorded new-build completions

17,760

88,800

Difference

67,129

335,645

Proportion of need achieved

20.9%

20.9%

London is not only completing the smallest proportion of its assessed housing need. It also recorded the largest negative difference between starts and completions during the period analysed.

The capital registered 10,870 starts against 17,760 completions, meaning 6,890 fewer homes began construction than reached completion during the recorded period.

London’s starts were equivalent to only 12.8% of its assessed annual housing need.

By comparison, the South East recorded 3,550 fewer starts than completions, while the East of England recorded 2,830 fewer.

The North East, South West and West Midlands all recorded more starts than completions during the same period.

Starts should not be treated as a direct indicator of future completion levels, since starts and completions in the same period may relate to different schemes and larger developments can take several years to build. However, the comparison shows that fewer homes entered London’s recorded construction process than left it during the year analysed.

Rosita said: “London completing around one in five of the homes represented by its assessed need is concerning on its own, but the five-year scenario shows how quickly that delivery gap could accumulate if current completion levels were maintained.

“At the current rate, fewer than 89,000 new-build homes would be completed against five-year assessed need of more than 424,000.

“The capital’s challenge is not identifying demand. The need for additional housing is already clear. The challenge is ensuring enough viable developments can move all the way from inception and planning through finance, construction and completion.

“London also recorded substantially fewer starts than completions during the period analysed. One year of starts data should not be treated as a direct forecast of future completion levels, because schemes move through the development process at different speeds. However, it remains a warning sign that fewer homes entered the recorded construction process than left it. If that pattern were sustained, it could make future delivery harder to maintain and increase the risk of the capital falling further behind assessed need.

“If that pattern were sustained, the difference between assessed need and completed homes would continue to grow.”