Record number of new London homes are unsold

The number of unsold London homes under construction rose to a record high 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. It is the highest level since the researcher began compiling data in 2009. Based on sales rates, it will take just over a year to sell the properties that have yet to find a buyer, according to Molior.

Purchases of homes under construction fell almost 8% to 5,470 units from a year earlier. Near-record prices, higher sales taxes and uncertainty surrounding the terms of Brexit 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. 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 said earlier this month.