London’s dejected housebuilders finally catch a break

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good news has been hard to find recently for the UK’s housebuilders. They are fighting battles on multiple fronts, from high interest rates and surging construction costs to cautious consumers. The government’s goal of building 1.5mn new homes across England by the next election seems a distant dream. But things are improving in one area, at least: the capital.

After two years of extremely depressed activity, new projects in London appear to be returning to normal levels. Construction began on 4,570 new homes in the first three months of 2026, according to data from the Ministry of Housing, Communities and Local Government, up 287 per cent year on year. The final quarter of 2025 was similarly busy. Those figures are roughly in line with the 2012 to 2022 average of 4,593, before the opening of a new Building Safety Regulator caused a plunge in activity.

The BSR was created with good intentions: to improve safety in high-rise buildings after the 2017 Grenfell Tower tragedy. But its early days involved serious teething pains. Developers complained about ambiguous and inconsistent requirements to get new projects approved, and huge delays.

This was particularly damaging for activity in London, where high rises make up a higher proportion of new builds. This time last year, a survey by the Royal Institute of Chartered Surveyors said BSR was the biggest single factor holding back housebuilding. 

An overhaul, including a new leadership team and increased staffing, seems to be paying off. The median waiting time for projects to secure a key approval to start construction was 22 weeks at the start of August, down from 43 weeks a year ago. Approval was granted to 7,587 units in the 12 weeks to August 1, of which around half were in London. 

Merely returning to normal won’t be enough if the government wants to meet its ambitious construction targets. Berkeley Group, a London-focused housebuilder, wants to see “more decisive intervention” including tax cuts. Others are pushing for demand-boosting policies such as a new help-to-buy equity loan scheme.

But even then, it’s no good lifting demand for apartments if firms can’t get approval to build them. Around 30,000 units are waiting for BSR approval: that’s the equivalent of the combined annual production of Barratt Redrow and Persimmon, the country’s two largest builders. Building safer homes is an important goal; if the aim now is to build more of them, easing bureaucratic bottlenecks is a good place to start.

[email protected]