London's housing market experienced a substantial drop in new construction, with only 4,770 homes started in the capital during 2024-2025. This represents a 72% decrease compared to the previous year.
The current housing market faces challenges including higher interest rates, build cost inflation, and weaker sales. Material and labour costs have also increased by 20-30% over the last five years, alongside new regulations and taxes.
Despite these conditions, some developers, like Ballymore and its joint venture partner Penta Real Estate, are commencing new projects in areas such as Canary Wharf, Nine Elms, and Battersea, with a total investment of £750m. They anticipate that developments started now will not be completed until 2029, by which time market conditions may have improved.
One such project, 25 Cuba, is a 52-story residential tower in Canary Wharf, a borough where housing starts have reportedly fallen by 91% over the last decade. A survey commissioned by the team behind 25 Cuba found that four in five prospective London home-buyers engage in entrepreneurial activities outside their main job, with almost half prioritising a home that supports their ambitions.