London new-build sales have dropped sharply, making up just 0.9% of all property deals in the past six months, research by Benham and Reeves found.
Out of 24,847 transactions in the capital, only 229 involved new-build homes, down 84% on the previous year when new-builds made up 3.7% of the market.
Several boroughs, including the City of London, Barking, Haringey, Lewisham, Havering and Merton, saw no new-build sales at all.
In another 15 boroughs, new-build homes were less than 1% of activity.
Newham was the only area where new-builds made up a significant share, accounting for one in 10 sales.
Brent and Tower Hamlets followed at 4.2% and 3.5% respectively.
Marc von Grundherr, director at Benham and Reeves, said: “The new-build sector in London has come under immense pressure over the last year.
“With developers grappling with higher material and labour costs, drawn-out planning processes, elevated interest rates and a more cautious level of buyer demand, it’s perhaps no surprise that sales volumes have dwindled.
“For many buyers, the premium price of a new-build home simply isn’t justifiable in the current climate when existing stock is more competitively priced and at the same time, developers have had to scale back launches in order to weather what has been an extremely challenging market environment.”
von Grundherr added: “Of course, London remains a city with chronic undersupply of housing and new-builds will continue to play a central role in addressing this imbalance, but whilst market conditions remain challenging, it’s the rental market that continues to pick up the slack with huge demand for rental properties.
“However, as confidence returns to the wider market, we expect to see greater activity within the new-build sector and a renewed appetite from both buyers and developers alike.”
