Unsold London Homes Under Construction at Record, Sales Fall

(Bloomberg) -- The number of unsold London homes under construction rose to a record in the first quarter as higher taxes, affordability issues and economic uncertainty damp demand for the most expensive properties.

The number of properties being built or completed that have yet to find a buyer surged to 27,000 units from about 25,000 at the end of last year, according to a report by Molior London seen by Bloomberg News. That’s the highest level since the researcher began compiling data in 2009. A spokesman for Molior declined to comment.

Based on current sales rates, it will take 1.2 years to sell the properties that have yet to find a buyer, according to Molior. Purchases of homes under construction fell 7.8 percent to 5,470 units from a year earlier, the data show.

Near-record prices, higher sales taxes and uncertainty surrounding the terms of the U.K.’s exit from the European Union have hurt demand for homes in London. Asking prices for homes in the British capital posted their largest drop in almost eight years in April, according to data from property website Rightmove Plc.

Specialist homebuilders in the U.K. capital fell. Telford Homes Plc dropped more than 3 percent, the most since April 7, and Berkeley Group Holdings Plc fell as much as 1.4 percent, the most in almost three weeks.

The number of new homes built in London will reach record levels in 2017 and more homes will remain unsold after completion this year than at any time over the past decade, broker Savills Plc said earlier in April.

To contact the reporter on this story: Sharon Smyth in London at ssmyth2@bloomberg.net.

To contact the editors responsible for this story: Neil Callanan at ncallanan@bloomberg.net, Paul Armstrong