Construction Loans News:- New residential build in London is at near-record levels for the second quarter of 2019 despite being way below London’s draft plan goal of 65,000 new homes a year, claims property agents Savills.

A total of 40,735 energy performance certificates, EPCs, for new builds were issued for May to June – an 8 per cent year-on-year rise, although a slight fall on the previous quarter.

Residential development researchers  Molior reveals sales for private units on sites of more than 20 homes is at 23,554 in the 12 months to the end of June in 2019 – a 10 per cent year-on-year increase.

However, the number of homes being built in London is rising at a slower rate than other regions. The figures are also well below Savills’ need estimate of 94,000 new homes a year.

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Brokers Hank Zarihs Associations said development funding for projects in the right locations was strong with construction loans and short-term bridging finance available at competitive rates.

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Savills said new starts and sales in the mainstream market of below £1,000 per square ft had continued to slip.

Acting head of London research, Edward Green, said: “In the year to the end of June 2019, there were around 16,000 private construction starts in the mainstream market on sites greater than 20 units. This represents a fall of 33 per cent year-on-year fall and the largest drop since the end of 2016.”

Prime new build sales increase

In the prime market of above £1,000 per square ft  the number of starts are back down to 2012 levels, but sales have increased on an annual basis for the first time since 2017.

Construction starts have continued to fall, with around 2,400 starts recorded in the year to the end of the second quarter of 2019. This represents an annual fall of -45 per cent, and by-19 per cent on a quarterly basis. Prime starts have remained at under 3,000 units for the last three quarters, the lowest they have been since 2012.

The Greater London Assembly will release the next figures for net conventional completions later this summer. Their latest release showed that from 2012 to 2017, the net supply of affordable homes has remained relatively stable, peaking at 7,610 in 2012-13, and only marginally falling below 7,000 once in 2015-16. However, these figures are still significantly lower than the peak of 2008-09, which saw 10,839 affordable homes delivered in London.

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