Research from consultants Molior has shown that just 5,547 starts were made on homes built by the private sector in 2025, compared to 33,782 in 2015.
Last year’s figure was significantly boosted by developers in Q4 – October 1 to December 31 – who started on 2,294 buildings in the three-month period.
However, with ministers demanding 88,000 new homes in London every year to meet growing demand, the figures could alarm senior figures in City Hall.
Lord Bailey, the City Hall Conservatives Housing spokesman, told the Local Democracy Reporting Service (LDRS): “Over nearly a decade of Sadiq Khan ’s mayoralty, London’s housing situation has gone from difficult to devastating — and it is ordinary Londoners who are suffering most.
“This is not just a housing crisis anymore — it is a crisis of stability, opportunity and dignity.
“I warned years ago that the Mayor’s approach would lead to a collapse in housebuilding. Sadly, that is exactly what has happened.
“London simply cannot meet its housing needs if it cannot build — and right now, under this Mayor, it is not building.
“It is time for the Mayor to take responsibility. His policies have stifled development, slowed delivery, and left Londoners paying the price through rising rents, soaring house prices, and the painful reality of being priced out of the city they call home.”
The research, released yesterday (Tuesday January 20), also revealed that 18,326 homes will be completed in London by the end of this year – around half of the buildings currently under construction.
14,053 are expected to be completed in 2027 and beyond – representing just eight per cent of the government’s 176,000-home, two-year London target. In other words, there is likely to be a 92 per cent shortfall.
This has not been helped by the fact that work has been halted on 5,009 homes at 51 development sites across the capital.
The Molior analysis suggests that this is either down to the building contractors “going bust” due to high construction costs or putting the work on hold deliberately due to a weak sales market.
The firm suggested that the capital’s housing market was “excluding” smaller developers due to long planning approval timelines, rising construction costs and a reduced customer base.
Just 8,436 new homes were sold in London during 2025, a factor Molior says is “directly contributing to fewer construction starts.” To meet government targets, at least 22,000 units are expected to be sold per quarter.
City Hall has been forced to take a number of measures to boost housebuilding in the capital, including agreeing a controversial package with the Ministry for Housing, Communities and Local Government (MHCLG) to slash affordability requirements for developers from 35 to 20 per cent.
A spokesperson for the Mayor of London told the LDRS: “Tackling our urgent housing crisis is a top priority for the Mayor and Sadiq is doing everything he can to deliver more homes of all tenures.
“This year, we are encouraging housing providers to bid for a record government investment of £11.7 billion through the Mayor’s Affordable Homes Programme to deliver social and affordable housing across London. It will work alongside the launch of a new City Hall Developer Investment Fund backed by an initial £322 million to support large scale projects in London.
“The Government has also confirmed its support for plans to extend the Docklands Light Railway to Thamesmead, which will help to unlock up to 30,000 new homes for Londoners across both sides of the river.
“However, housebuilding continues to be impacted by a perfect storm due to the disastrous legacy of the previous government, high interest rates, the rising cost of construction materials, the impact of the pandemic and Brexit and Building Safety Regulator delays.
“That is why we are working closely with the Government on a series of time-limited, emergency measures to unblock housebuilding, including new powers for City Hall to review and call-in housing schemes, new leadership at the Building Safety Regulator and backing new towns in our city as we continue to build a better, fairer London for everyone.”
