Construction of luxury flats in central London dropped by a quarter last year, with apartments housed in developments dubbed “posh ghost towers” struggling to sell.
New-build starts in the capital in 2017 dropped by 25.4% compared with 2016, according to a report by London Residential Research and the luxury estate agents London Central Portfolio (LCP).
The number of new-build starts fell in seven of the 11 inner London boroughs featured in the study, with a 62% decline in Southwark (where there has been significant development around Elephant and Castle) and 42% falls in Wandsworth (which includes the developments along the Thames in Battersea and Nine Elms) and Westminster. In total, new-build starts in the inner boroughs fell by 3,810 units.
Naomi Heaton, the chief executive of LCP, said developers were scaling back their ambitions after realising there was “a huge oversupply of over-commoditised new-build boxes” in London.
“An awful lot of what was built was generic and overpriced and they struggled to sell it,” she said. “Historically, a lot of properties would have been bought by overseas investors in the assumption that they could flip it and sell it on at a huge profit, but now there is huge nervousness following increases in stamp duty and the the impact of Brexit.”
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