Sir Sadiq Khan’s target of building 88,000 homes a year in London has been branded “impossible” by property analysts after a sharp slowdown in construction.
Market analysts Molior found just 2,103 private new‑build homes were started in the capital in the first three months of 2026 — far below the 22,000 quarterly starts needed to hit the Mayor’s goal.
Although the figure is higher than last year’s quarterly average of 1,397, analysts said the overall pace of development remains “awful”.
The slowdown raises fresh questions over Labour’s national pledge to deliver 1.5 million homes by 2030, with London expected to shoulder a significant share of the build‑out.
By the end of March, 36,735 homes were under construction in the capital — around 84 per cent below the estimated 225,000 needed to sustain annual completions of 88,000.
Molior founder Tim Craine said: “To complete 88,000 homes a year, you need more than 88,000 homes under construction. You probably need two and a half times that number.”
He noted that while London has roughly 300,000 planning permissions, many are outline approvals unlikely to be delivered simultaneously
“London maybe has a natural delivery rate of about 20,000 homes a year,” he said
Molior projections suggest that by early 2028, just 5,889 private homes will be under construction.
The slowdown has coincided with a steep drop in transactions.
Only 2,838 homes were sold in London in the first quarter of 2026, compared with 8,586 in a single quarter in 2015.
Mr Craine said falling values have dampened demand, leaving buyers unwilling to commit to off‑plan purchases. “No incentive to buy off‑plan,” he said.
“And with zero off‑plan buyers, you get zero construction from anyone that needs to get debt from the bank.”
Halifax data shows London house prices fell 1.2 per cent on average, amid wider market uncertainty and higher mortgage rates.
Deutsche Bank has warned UK prices could fall by up to five per cent this year.
The Ministry of Housing said it remains committed to boosting supply.
A spokesman said: “We’re taking decisive action to get spades in the ground in the capital so we can restore the dream of homeownership for Londoners,” citing emergency measures to unblock stalled sites and deliver more affordable homes.
“We will leave no stone unturned to help London meet its housing target,” he added.
Sir Sadiq Khan has already reduced the affordable housing requirement from 35 per cent to 20 per cent in an effort to accelerate development.
But Mr Craine said even with these changes, the target remains out of reach. “It’s physically impossible to reach the target,” he said.
