Investment in new homes in the capital dropped to its lowest level since 2012, new figures have revealed.
The Construction Products Association (CPA) and Barbour ABI survey of the housebuilding sector found that the value of contracts awarded in 2017 were over a third lower (34 per cent) than the previous year, whereas the majority of regions outside the capital experienced growth.
The report stated that “although London is the largest regional GB economy, and had £3.6bn of residential contracts awarded in 2017, an increase in demand for new homes is coming from areas such as Manchester, Birmingham, and Sheffield as they undergo city centre regeneration projects.
“Across all GB regions, London came bottom for residential contracts growth, with overall values falling by 33.9 per cent from 2016 to 2017.”
According to the survey there were only two hotspots of construction activity in Haringey and Islington and Hounslow and Richmond upon Thames.
All other areas in London experienced a fall in contract value, with the largest falls in Tower Hamlets, Lambeth, Waltham Forest and Croydon.
Similarly, the commercial sector in London experienced sharp falls, with commercial contracts falling by 38.5 per cent from 2016 to 2017, totalling £2.1bn. Of the London regions only Croydon was an area of hotspots activity, driven by higher volumes of low-value retail and office fit-out projects.
Barbour ABI lead economist Michael Dall said: “The decline of residential building in London highlights the changing landscape of construction across the UK.
“What our report shows is that, driven by consumer demand, developers are frequently looking outside of the capital for new residential investments, highlighted in growth cities such as Manchester and Sheffield.”