Developers offload new London properties, sending Q4 sales up

London

SALES of new London apartments accelerated in the final quarter of 2019 as developers offloaded properties in bulk to investors.

Buyers snapped up 16 per cent more of the homes from October to December than a year earlier, according to a report compiled by researcher Molior. That was the strongest quarter for sales since the start of 2018.

Developers who ramped up construction following the financial crisis have been caught in a pincer of tax hikes and political uncertainty that has dented demand.

Institutions have taken advantage of the glut of unsold properties, with their purchases jumping to 31 per cent of all sales in the fourth quarter, according to the report.

The December 2019 UK election result also brought more certainty, while demand has grown from Hong Kong investors amid the unrest there.

"In developments where units are completing faster than marketing suites can sell them, there are several examples of last-minute bulk deals," the report's authors Sam Long and Tim Craine wrote.

Around 29,500 homes being built in the city remain unsold, or about half of the total. About 3,900 properties that have been completed are yet to find a buyer - up 44 per cent from a year ago.

The problem of unsold homes is particularly acute in outer London, where the number of completed but unsold homes has almost doubled, with those that are too expensive to qualify for the government's "Help to Buy" loan programme proving particularly hard to shift, the report said.

"The number of schemes where construction has stalled is growing," the report said.

"Usually the projects involve smaller developers, and this raises questions regarding the due diligence carried out by the projects' funders." BLOOMBERG