A severe deepening of London’s housing crisis is expected from 2027, according to John Mulryan, chief executive of major developer Ballymore. He warns that while many believe the crisis is already in full swing, the capital is yet to experience its true impact, describing the impending situation as a “shock” that will be “terrible for the city.”

A Drastic Drop in New Home Completions

Mulryan, in an interview with The Irish Times, highlighted that private housing starts in London have fallen sharply over the past decade. This decline means that the British government’s target for new home building in London is on track to be undershot by a staggering 92 per cent based on the current development pipeline. While completions have not yet significantly decreased, Mulryan predicts this will change soon. “They will, though. And that will be the real housing crisis. It will be especially bad in 2027, 2028 and 2029 when we will suddenly see very few new-build completions in London across affordable and private housing,” he stated.

This projected lack of supply is expected to exert significant upward pressure on pricing and rents. Mulryan contrasted London’s trajectory with that of Ireland, where housing completions are projected to rise from 12,000 in 2015 to 36,000 in 2025.

Empty Properties and Developer Challenges

Despite the warnings of future shortages, property consultant Nathan Khider, founder of Nathan K Real Estate, estimates that around 22,000 new-build homes are currently standing empty across London. Khider suggests that buyers may find better deals over the next 12 to 18 months as developers face increasing pressure to sell these unsold properties, as reported by The Intermediary.

Developers are grappling with high land and construction costs alongside weaker sales values, meaning they are often unable to achieve their expected prices. Khider noted, “The problem developers have is that they’ve already spent huge amounts of money buying the land and building these developments, so they can’t afford to sell the properties for much less. But at the same time, they’re not getting the values they expected. Something eventually has to give.” He advises patience for new-build buyers, suggesting opportunities for negotiation could arise.

Implications for London’s Housing Market

The combination of a drastic reduction in new home completions anticipated in the coming years and the current challenge of selling existing empty new-builds points to a complex and potentially severe future for London’s housing market. The projected lack of new supply from 2027 onwards is expected to intensify competition for homes, driving up costs for both renters and buyers across the capital.

Frequently Asked Questions

• Q: When is London’s housing crisis expected to worsen?
• A: The crisis is anticipated to be “especially bad in 2027, 2028 and 2029” due to a sharp drop in new-build completions.
• Q: Who is making these predictions?
• A: John Mulryan, chief executive of major developer Ballymore, shared these warnings in an interview with The Times (of London).
• Q: How many new-build homes are currently empty in London?
• A: Property consultant Nathan Khider estimates around 22,000 new-build homes are currently standing empty across London.
• Q: What does this mean for property prices and rents?
• A: The projected lack of supply from 2027 onwards is expected to create “upward pressure on pricing and rents.”