The third quarter of 2018 has seen some mixed results. There have been a number of individual success stories, but they have to be picked out from a bleak wider picture - you have to go back as far as 2012 to find quarterly figures so low for both construction starts and sales.
To a certain extent much of this should be expected given that the country has recently voted twice for a period of uncertainty - both in the 2016 European Union Membership referendum and in the subsequent general election.
However, rather than dwell on stories repeated ad-nauseam elsewhere, it seems there is more to be learnt from the successes of the last quarter:
- Developments in Underground Zone 3 and outwards have, in general, sold well.
- A number of individual schemes have sold very well in Zones 1 and 2.
- By and large failed completions are gradually being mopped up by subsequent sales.
- The mood in the Far East seems to be that Brexit does not spell doom for London’s new homes market.
Individual success stories are described within the report but the point is that, while there are buyers in the market, they are faced with a lot of choice and will only pay for the best on offer. Consequently, the market is very ‘hit and miss’. Developers looking to commence new schemes do best if they own their corner of the market, both in terms of price and product.
- Across London planning applications have been falling since 2014 - at the current rate 40% fewer units will be applied for in 2018 compared to 2014.
- During 2017 and 2018 so far it has taken 13 months on average to gain full consent, longer than at any time since the 2009 recession.
- 17,000 units started construction during first three quarters of 2018 - this year's starts are on course to be the lowest since 2013.
- 16,000 units have sold in total during the first three quarters of 2018 - this year's sales are on course to be the lowest since 2012.
- A third of all sales during 2018 so far have been accounted for by BTR.
- Sales in Zone 1 during 2018 so far are 20% down on the average from 2013 to 2017 pro-rata.
- Meanwhile sales in Zone 2 are 30% down on the 2013 to 2017 average.
- But sales in Zones 3-6 are 8% up on the 2013 to 2017 average.