The whole of the UK is facing an inflation-fuelled economic squeeze, but developers in London have little cushion to absorb build cost rises. Joey Gardiner looks at what this means for private and affordable delivery in the capital
It doesn’t take a genius to see the economic storm clouds gathering right now. But while the housebuilding sector as a whole has thus far been remarkably resilient to the growing cost of living crisis, there is increasing evidence that something is well and truly up with the London development market.
Marc Vlessing, chief executive of boutique resi developer Pocket Living, which just recorded a £19m loss for the 2021 calendar year, says its own performance should be read as a “canary in the mineshaft” for a wider London market stricken by a weakening economy, crashing against the wall of accelerating build costs and rising planning and policy hurdles. “I think that the housing starts for London over the next two years are going to be very, very significantly down on where commentators believe they will be,” he says.
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