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Insufficient New Housing Supply in London to Trigger Supply-Demand Imbalance?
四月 7, 2024
Insufficient New Housing Supply in London to Trigger Supply-Demand Imbalance? 伦敦
By   Internet
  • 都市报
  • London Property Market
  • London Real Estate Market
  • New Housing Supply
Abstract: The London real estate market is currently experiencing a state of imbalance between supply and demand, with insufficient new housing supply potentially having long-term adverse effects on the market. Government and local authorities need to take more measures to increase housing supply to meet the growing demand, while investors also need to carefully assess market risks to achieve long-term returns.

Recent data shows that the London property market is confronting significant challenges. According to the latest report, the number of new homes completed in London in 2023 decreased by almost 50% compared to the previous year, totaling only 13,501 units. This sharp decline has raised concerns about inadequate market supply, especially given the projected increase of 148,000 people in London's population over the next five years.


A report by Savills warns that while population growth is rapid, new housing supply has not kept pace with the growth in demand. This trend is expected to lead to more housing shortages, resulting in long-term negative effects on the market. According to Sharif Ibrahim, the director of the report, although many administrative areas are expected to experience population growth rates exceeding the average, these areas have failed to provide sufficient housing.


Newham and Barnet are administrative areas with relatively high completion rates, having completed 1,218 and 1,003 new homes, respectively. However, some other administrative areas, such as Merton and Sutton, have seen minimal new home completions, further exacerbating the supply-demand imbalance.


Insufficient New Housing Supply in London to Trigger Supply-Demand Imbalance?

Internet


Newham Mayor Rokhsana Fiaz has initiated an initiative calling for more housing to be built on sites previously designated for other purposes. This indicates that government and local authorities are taking steps to address housing shortages, but more action is still needed to tackle this challenge.


The Savills report also points out that London needs to build 17,000 affordable homes annually, but the actual delivery falls far short of this number. Southwark is the only administrative area that delivered over 500 affordable homes in 2023, while other areas delivered even fewer.


Another report indicates that there are currently around 265,000 new homes under construction in London, but 48% are still in the planning stage, suggesting that more new homes may enter the market in the coming years. However, this may not fully resolve the current supply-demand imbalance, as new home construction takes time, and market demand may continue to grow.


Despite facing numerous challenges, the London property market also presents significant opportunities for investors. However, investors need to closely monitor market dynamics, understand supply and demand conditions, and carefully assess risks to ensure long-term returns. Government and local authorities also need to take more measures to increase housing supply and alleviate the supply-demand imbalance in the market.

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Insufficient New Housing Supply in London to Trigger Supply-Demand Imbalance?
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