Report: London Homes Falling Short of Demand Report: London Homes Falling Short of Demand
01-01-2014
By Francys Vallecillo
The city of London needs to build about 50,000 new homes each year, approximately double its current rate to satisfy the city's growing housing demand, a new report shows.
The number of homes needed in the next five years equates to 18 new Olympic Villages, with more than half of the demand stemming from the lower end of the market, according to Savills.
London's current five-year pipeline includes an average of 28,500 new homes a year, falling short by 21,500 new homes needed a year, or 107,500 homes by 2018, Savills reports.
"Last time London's population peaked at 8.9 million in the 1930s we were building around 60,000 homes a year," Susan Emmett, Savills residential research director, said in the report. "Back then, the city was visibly overcrowded and there were slums to clear."
Today the housing crisis is not as visible, with many signs showing up "behind closed doors," the firm says. The growing demand is fueled by the expected growth of London's population -- increasing by one million in the next eight years.
In September, London Councils also reported the large number of homes needed in the capital in the next decade.
The largest housing demand come from households with incomes of less than £50,000 a year; 57 percent of new homes should be built for this lower end of the market, Savills reports. Only 6 percent of demand is for new prime homes.
The reports identifies enough land sites to build 850,000 new homes, along with surplus public land, industrial land and estate regeneration to consider.
"Developers have focused on the top end of the market since the credit crunch, but it is clear that the very deep seam of demand - and therefore the bomb proof opportunity for developers - lies at the lower end of the market," Ms. Emmett said.