Thousands of newly built homes across London are sitting unsold as rising service charges, higher taxes, and weakening buyer demand continue to slow the capital’s housing market.
New figures from property agency JLL show that more than 3,600 completed new-build homes remained unsold at the end of March 2026. An even larger number of properties currently under construction have yet to secure buyers, bringing the total number of unsold new homes in London to around 22,000.
The figures highlight the growing pressure facing London’s housing market, particularly within the flats sector, where affordability concerns and additional ownership costs are discouraging both buyers and investors.
Supply Continues to Build Across the Capital
According to JLL, the number of unsold homes now sitting on the market represents roughly 29 months of supply based on current sales rates.
That means it could take more than two years to clear the current stock of homes already listed for sale, even before accounting for additional properties entering the market.
The situation has worsened significantly compared with previous years. In 2021, London had around 19 months of unsold supply, while back in 2013 the figure stood at just seven months.
In some parts of central London, the oversupply problem is even more severe.
JLL estimates that inner London boroughs currently hold the equivalent of more than four years of housing supply when combining completed and under-construction homes. In areas such as Kensington and Chelsea, the supply is believed to stretch beyond a decade at current demand levels.
Fewer Buyers for Off-Plan Properties
Traditionally, many London developments were sold “off-plan”, with buyers purchasing homes months or even years before completion.
However, weaker market conditions have reduced appetite for this type of investment.
Sales agreed more than two years before completion have fallen sharply in recent years, reflecting growing caution among buyers worried about affordability, economic uncertainty, and future housing costs.
At the same time, fewer investors appear willing to commit to new-build purchases, particularly within the buy-to-let sector.
Service Charges Continue to Rise
One of the biggest concerns for buyers remains the sharp increase in service charges attached to many London apartment developments.
According to JLL, service charges have risen substantially over the past five years, particularly in developments offering additional amenities.
Buildings with facilities such as gyms, swimming pools, cinema rooms, concierge services, or co-working spaces have seen some of the largest increases.
Even developments with more limited shared facilities have experienced notable rises in annual management and maintenance costs.
Industry data suggests the average service charge for a London flat is now approaching £4,000 per year, adding a major ongoing expense for homeowners already dealing with high mortgage repayments and living costs.
For many buyers, these additional charges are becoming increasingly difficult to justify.
New Builds Still Carry Premium Prices
Pricing remains another major issue affecting demand.
New-build homes in London continue to command a significant premium compared with older properties, making them less affordable for many buyers.
JLL estimates that new homes in the capital cost around 26% more per square foot than existing homes.
As affordability pressures continue, many buyers are opting for older properties that offer lower purchase prices and potentially lower ongoing costs.
The end of the Help to Buy scheme has also contributed to weaker demand.
At its peak, the scheme supported thousands of new-build purchases across London each year, particularly among first-time buyers. Since ending in 2023, there has been no direct replacement programme, leaving many buyers struggling to access the market.
Stamp Duty Adds More Pressure
Stamp duty costs are also creating additional barriers for buyers in London.
With property prices remaining high, many purchasers now face significant upfront tax bills on top of deposits and mortgage costs.
A buyer purchasing a £600,000 home in London could face stamp duty charges of around £20,000, while second-home buyers and landlords may pay considerably more because of additional surcharges.
Overseas buyers also continue to face higher purchase taxes, adding further costs that may discourage international investment in the capital’s housing market.
Industry figures argue that these combined costs are making homeownership and property investment increasingly unattractive.
Landlords Continue to Pull Back
Investor demand for new-build homes has also weakened considerably.
Many landlords are reconsidering their position in the market because of rising taxation, tighter regulations, and changes introduced under the Renters’ Rights Act.
Buy-to-let investors now face additional stamp duty charges and reduced mortgage interest tax relief, while growing regulation has added further uncertainty around future returns.
JLL says investor activity has slowed noticeably, with many landlords choosing to reduce their portfolios rather than expand them.
Industry experts believe this decline in landlord demand is having a direct impact on the number of unsold flats across London developments.
Overseas Demand Also Weakening
The luxury market has also slowed significantly.
According to the report, overseas demand for new homes in central London has fallen sharply compared with long-term averages.
At the same time, sales of high-value flats above £2 million have dropped considerably year-on-year.
Even homes priced below £1 million have seen substantial declines in sales activity compared with previous years.
The slowdown reflects broader concerns around taxation, economic uncertainty, and weaker confidence in the London property market.
House Prices Continue to Fall
Separate figures from estate agency Knight Frank show that prices in prime central London have continued to decline.
Average values in some of the capital’s most expensive areas fell again over the past year, extending a much longer period of price weakness stretching back nearly a decade.
Market activity has also slowed, with fewer prospective buyers entering the market while the number of available listings continues to rise.
This imbalance between supply and demand is placing further downward pressure on prices.
Developers Slow Construction Activity
As demand weakens, developers are also reducing the pace of new construction projects.
The number of new homes being started across London has fallen sharply compared with previous years, with developers becoming increasingly cautious about launching projects into a slower market.
Although planning issues remain a challenge, the larger concern appears to be declining buyer demand and uncertainty around future sales.
Many developers are now scaling back construction programmes until market conditions improve.
Growing Questions About London’s Housing Market
The growing number of unsold homes raises wider questions about affordability, taxation, housing policy, and the future direction of London’s property market.
While demand for housing in the capital remains high overall, many buyers are struggling with the combined pressure of higher borrowing costs, expensive service charges, large tax bills, and wider economic uncertainty.
Industry figures continue calling for policy changes aimed at improving affordability and supporting both buyers and investors.
Without changes to taxation and ownership costs, many believe London’s new-build sector could continue facing significant oversupply and slowing demand for some time yet.
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