London housing could face 48% undersupply in next decade, research shows

The report (5-page / 1.56MB PDF) showed that an additional 525,790 households are expected to be created in London in between 2011 and 2021. This will create a demand for an extra 52,579 homes to be built each year, including 37,492 private sector units.

The report said that in central London, comprising the four boroughs of Kensington and Chelsea, Camden, City of London and Westminster, an extra 41,860 households are expected to be created between 2011 and 2021, creating an estimated private sector demand of around 3,218 a year.

Figures in the report showed that around 277,240 homes are expected to be built in Greater London over the next ten years, with around 177,340 of these being in the private sector. In central London, around 19,700 housing completions are expected, including 14,590 private sector homes.

Around 2,000 "pre-planning" schemes are currently waiting to start the planning process. The report said that these schemes could create 650,000 homes if they are all completed, however, there is no guarantee that they will be delivered.

A further 2,000 schemes are currently in the planning system or under construction, with developments having permission for 1,000 homes or more making up 35% of such schemes. However, some of the bigger schemes could take decades to complete, the report noted.

The report's data showed that the highest level of housing completions are expected within the boroughs of Newham and Greenwich. The highest value of private sector housing by the end of 2022 is expected to be found within Tower Hamlets, at £7 billion, with Hammersmith and Fulham second on the list at £6.8bn.

The figures in the report are based on data from the Department for Communities and Local Government, which has recently been revised to take into account population data from the 2011 Census for the first time.

"The overall trend for development in London shows that demand for housing in the capital will continue to outstrip supply by quite some margin," said Knight Frank head of UK residential research Gráinne Gilmore in a statement. "There is widespread recognition of the housing shortage in the capital, with the Mayor pushing hard to encourage higher levels of development."

"While it is impossible for us to second-guess developers about when they will bring schemes forward, our judgements on schemes within the planning pipeline show that overall delivery will not match demand," Gilmore said.

"However, we are not discounting 'oversupply' in some local areas, with delivery outstripping local demand as measured by our data. However, the fluidity with which people can and do move across London suggests that the headline figures for supply and demand are a better indication of the wider trend in London," she added.