London managed to build just 7 per cent of the new homes it required last year, a fresh signal that Sir Keir Starmer’s flagship pledge to deliver 1.5 million homes across England by the end of the parliament is in serious trouble.
According to a new report from property consultancy JLL, the capital delivered only 6,325 homes in the twelve months to March 2026, against an annual need of 88,000 — leaving a yawning gap that property professionals warn cannot be closed without urgent policy intervention. JLL’s London housing challenge analysis puts private-sector starts down a remarkable 84 per cent since 2015.
The reasons are familiar to anyone who has tracked the capital’s residential market over the past three years: stretched buyers, departing landlords, ballooning service charges and a planning system that continues to throttle delivery.
Buyers boxed in by rates and the loss of Help to Buy
Higher-for-longer interest rates remain the single biggest drag on demand. Mortgage affordability has tightened sharply, and renters trying to scrape together a deposit are losing ground to rising rents.
The squeeze is particularly acute on new-build stock. JLL’s figures show prospective buyers are now paying a 26 per cent premium per square foot for a London new build compared with an equivalent second-hand property, a gap that, in the absence of Help to Buy (which closed to new applicants in 2023), first-time buyers are simply struggling to bridge.
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