Residential construction levels in London are up 9 per cent from summer 2010 due to positive sentiment around Kick Start, but analysts say weak demand will encourage developers to ‘slow peddle’ delivery.
Nearly 30,000 units are under construction across 169 schemes in the capital, including 8,500 new units that commenced over the last six months, according to the latest Drivers Jonas Deloitte Residential Crane Survey.
Almost a third of new supply is coming forward in the East sub-region, although it is lagging behind in terms of new activity. The Olympic boroughs account for 40 per cent of current supply.
Despite recording the third highest level of construction overall, development in Greenwich has decreased by nearly 10 per cent over the last six months, due to the completion of several large schemes.
DJD head of research Anthony Duggan said: ““The results of this survey show a mixed picture. Positively new construction starts have risen – probably reflecting decisions made a year or so ago when there was more confidence around and Kick Start was still having a positive impact. However, the actual delivery data for 2010 shows a material reduction on 2009 and this is consistent with our general sentiment for where residential supply for London is heading.
“It will be interesting to see just how many units are actually completed in 2011. Our analysis shows that the number could show an improvement on 2010 as scheme construction starts are up. However our instinct is that weak demand will encourage developers to ‘slow peddle’ delivery and that ultimately supply will be similar to 2010.”