London is facing a significant setback to its housing supply, with at least 42,000 planned homes— including a minimum of 12,000 affordable units — expected to be lost from the city’s residential development pipeline, according to new research from property consultancy Savills.
The analysis highlights growing pressure on the capital’s housing market, identifying 77 sites totalling nearly 30,000 homes that are now unlikely to be delivered despite already having planning permission for residential development.
Of these sites, around 14% are expected to be repurposed for non-residential use, while most landowners are reportedly choosing to retain existing uses for the foreseeable future rather than proceed with construction.
A further 25 sites that had been earmarked for housing in local development plans have also stalled before reaching the planning stage. This accounts for an additional 12,000 homes no longer expected to be built. Savills warns that, in practice, there could be up to 10,000 more homes at risk beyond these figures.
The losses are heavily concentrated in outer London boroughs, where lower property values and weaker development viability are making projects increasingly difficult to deliver.
According to Savills, the slowdown in housing delivery has been building for several years but has accelerated sharply over the past 18 months, reflecting wider challenges in the UK housing market, including rising construction costs, financing pressures, and reduced developer confidence.
The findings add fresh pressure on policymakers as London continues to fall behind its long-term housing targets, particularly for affordable homes, amid worsening supply constraints and growing demand.