A new report from the Home Builders Federation (HBF) shows that housing delivery in London is in a major crisis and warns that home building targets will be unachievable without intervention to improve the deliverability of homes in the capital.
Notably, the report shows it will now take over a decade of saving over 50% of your income to become a first-time buyer in the city.
A lack of support for buyers; excessive bureaucracy; unrealistic affordable housing demands and huge delays getting applications approved, not least with the Building Safety Regulator, are all strangling attempts to deliver desperately-needed new homes, the group said.
With the capital expected to deliver 440,000 of the Government’s 1.5 million new homes target by 2030, housing delivery indicators continue to head in the wrong direction, with both housing completions and planning permission approvals falling year-on-year, putting this at significant risk.
The report highlights that only 30,000 homes were completed in London in the year to June 2025, as measured by the number of new properties issued with Energy Performance Certificates, down 12% from the previous year and significantly below the 2019/20 peak.
Planning permissions have also taken a nosedive, dropping to their lowest level since records began in 2006, with just 966 projects approved in the 12 months to June 2025.
Adding to the crisis, the overall share of national housing delivery in London has also continued to shrink from 20% a decade ago to just 15% today.
Meanwhile the number of new home building sites starting has plummeted by 38%. With the Government’s Standard Method setting a requirement for London to deliver 88,000 homes a year, output would need to more than double, increasing by 175%, to meet that goal, casting serious doubt on the city’s ability to meet future needs and make the required contribution to Government’s 1.5 million homes target.
How long does it take to save for a deposit?
“The housing affordability crisis is affecting the entire country, with a lack of affordable mortgage lending available, and it is the first time in decades that there is no Government support in place for buyers. But nowhere is it more acute than in the capital,” the HBF said.
The group noted that Londoners face the highest barriers to home ownership in the country, and a first-time buyer would need to save 50% of their discretionary income for more than 13 years to afford a deposit, with average deposits now amounting to nearly seven times annual income after bills.
The house price-to-earnings ratio stands at 11 in London, compared to 7.7 nationally, and the average cost of a first home is now 17 times the net annual salary of a 22– to 29-year-old.
This crisis is pushing more Londoners out of home ownership and into the private rented sector, the HBF said.
“Only 15% of first-time buyers purchased a home in the capital in 2023/24, a sharp drop from 25% 10 years ago. At the same time, the proportion of households renting privately has more than doubled over the past two decades, while those with a mortgage have fallen from 39% to just 25%.
“This suppressed buyer demand for new homes is undermining industry confidence and its ability to invest in new sites and get projects started.”
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