London’s stockpile of unsold homes jumps to record high
LONDON’S stock of completed but unsold homes has surged by almost half this year as Brexit uncertainty and affordability issues dog the housing market.
The number in the capital jumped to 2,374 units as of Sept 30, the most on record and up from 1,595 at the end of 2017, according to data compiled by Molior London.
The borough with the biggest stockpile is Wandsworth, an area that borders the River Thames, followed by Croydon, an outer borough in the south of the city.
“Some of this excess has built up because it’s the wrong product at the wrong pricing for what people want to, and can afford to buy,” said Tim Craine, the founder of the property research firm.
“For the rest, it’s a case of bad timing due to the lull in the market that’s come about due to Brexit.”
Britain’s housing market is slowing after a multi-year boom as the UK’s impending divorce from the European Union weighs on sentiment and prices remain out of reach for many potential buyers.
It now takes the average Londoner 14.5 times their annual salary to purchase a home, the highest multiple ever, according to Hometrack.
Overseas buyers from Asia to the Middle East piled into London property in recent years as a weak pound and price gains made the British capital’s real estate an attractive investment.
Developers began building higher-end homes to capitalise on that demand, and many have been left holding empty units as foreign investment dwindles amid a rise in property taxes.
Asking prices for UK homes fell for the first time since 2011 in October, data from Rightmove showed, with prices declining the most in the centre of London.Asking prices dropped 0.2 per cent overall, while in Greater London, they declined 2.4 per cent annually.
Homes located within London’s Zone 1 area lost the most, with a 6.9 per cent retreat on the year to an average of £1.3 million (S$2.28 million).