In London's New Homes Market, Value Still Rules for Now

Knight Frank argues that London's new homes market has become highly price-sensitive, but that sharply falling completions mean supply, rather than value, could become the deciding factor by the end of the decade.

The wider UK market has settled after several volatile years. Leading fixed mortgage rates have sat just under 4% through the summer, monthly mortgage approvals have broadly matched the 2019 average, and Nationwide records annual house price growth of 2.1%. Pent-up demand from buyers who waited out peak rates is being balanced by economic uncertainty and still-negative consumer confidence, leaving buyers focused on price. Rightmove data showed modest asking price cuts in July helped deliver the strongest July for transactions since 2020.

In London, developers who can demonstrate value through pricing, design or positioning have seen stronger sales. Knight Frank cites three examples:

• The Broadley in Marylebone (Mount Anvil): 63 reservations since its early July launch at an average of about £1,450 psf, with a notable return of off-plan investors • Retro in Fulham: almost all nine units sold within six months at around £1,095 psf, below comparable new builds at £1,300 to £1,400 psf • The Clay Yard in West Hampstead: over half sold in the first nine months at just over £1,100 psf, with nearly 100 sales since and minimal discounting

At the end of June 2025 there were more than 3,500 completed but unsold homes in London, up from just under 3,000 in 2023 but below the 2018 peak. That figure is expected to fall as rates ease. Developers started fewer than 2,200 private homes in the first half of 2025, around 5% of the government's target, and unsold homes under construction have fallen from over 30,000 in 2018 to just over 20,000.

Only 9,100 private homes are scheduled to complete in 2028 and 2029, against a notional need of 176,000. Knight Frank concludes that schemes launched in the next year and completed then will enter one of London's most supply-constrained markets in more than a decade.

Source: Knight Frank Newcastle, original article (6 October 2025)