London new-build sales drop 37% as 4,629 homes sit unsold

London’s new-build housing market has contracted sharply, with sales in the first six months of 2026 falling to 5,606 units. Property consultancy Molior reported the figure to the Evening Standard, marking a 37% decline on the 8,840 sales recorded in the same period last year. February 2026 saw only two new homes sold across the capital, compared with 4,189 existing properties.

The slowdown has left 4,629 completed new homes unsold in the three months to June 2026. Molior estimates the stock is worth £3.5bn. The consultancy called the level the highest it has ever recorded. Historically, London has averaged around 1,000 new-build sales each month since 1995.

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Developers pause sites across Barnet and London

Fifty-six developments have been paused, halting construction on 3,913 homes. Molior’s data shows that 70% of homes currently under construction will complete by the end of 2027. That leaves only 8,750 homes forecast to remain on site by January 2028, a reduction that will affect supply in Barnet and other boroughs.

Barnet Council has not yet disclosed which local schemes are among the paused sites. Planning officers confirmed that consent deadlines may need to be reviewed if developers cannot restart work within the statutory period. Residents near stalled sites in Colindale and Mill Hill have already raised concerns about blight and delayed infrastructure.

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Construction costs rise 75% in a decade

Rising costs have compounded the market slowdown. This is Money reported that the cost of building a typical two-bed flat in London has increased by 75% since 2016. A 70-square-metre unit now costs £430,000 to construct, up from £245,000 a decade ago. The figure includes materials, labour and compliance costs.

British buyers disappear from the market

British owner-occupiers accounted for only 3,320 new-build purchases in 2025. The figure includes first-time buyers and home movers. Jeremy Matallah, co-founder of rent-to-buy scheme Keyzy, told the Evening Standard that saving for a deposit while paying London rents has become the main obstacle for first-time buyers.

Every day we speak to people who can afford the monthly cost of homeownership but can’t raise the deposit.

Jeremy Matallah, co-founder of Keyzy

Matallah added that sales to UK individuals have fallen by almost 40% in two years. Companies now account for four out of five new-build sales in the capital. London Square holds just over 5% of the market, while Berkeley Group is building 16% of London’s private homes. Vistry Group holds just under 5%.

What happens next in Barnet

Barnet Council’s planning committee will review consent deadlines for stalled sites at its next meeting on 12 September 2026. Officers have warned that extensions may be necessary if developers cannot restart work within the current timeframe. Residents can submit comments on individual applications via the council’s planning portal.

Molior director Tim Craine told the Evening Standard that investors are selling older new-build units at discounts of up to 20%. In Canary Wharf, around 1,000 second-hand new-build apartments are currently for sale. Craine said the oversupply is suppressing prices and deterring new development.

Andrew Pemberton, a chartered building engineer, added that inconsistent build quality has also eroded buyer confidence. The Professional Snagging Company has reported wide variation in standards, even between phases of the same development. Pemberton said the combination of affordability, quality concerns and rising costs has stalled the market.