London registrations surge as UK housing slows

NHBC recorded 29,162 new homes registered for construction during the second quarter of 2026, representing a 4% decline from the 30,259 homes recorded during the corresponding period last year.

The national reduction concealed substantial regional differences. London registrations increased by 170%, rising from 896 to 2,417 homes, while growth was also recorded in the North West, East of England, South East, West Midlands, and Scotland.

Although the London increase was pronounced, it followed an exceptionally weak comparison period and remained below the quarterly levels achieved before the pandemic. Large apartment projects are also commonly registered in blocks, making results in the capital more volatile than regions where smaller developments are phased more evenly.

Private sector registrations fell by 5% to 19,045 homes, compared with 20,097 a year earlier. Affordable housing and build to rent registrations were broadly stable at 10,117, against 10,162 during the second quarter of 2025.

Six of the UK’s 12 regions recorded annual declines. The South West fell by 42%, the East Midlands by 36%, and Wales by 34%, while registrations increased by 37% in the North West, 15% in the East of England, 12% in the South East, 7% in the West Midlands, and 6% in Scotland.

Completed homes provided a firmer measure of output, increasing by 1% to 32,973. Completion figures reflect development and procurement decisions made several quarters earlier, so they respond more slowly than registrations to changes in demand, finance, planning, regulation, or site starts.

NHBC chief strategy officer Daniel Pearce attributed the weaker national market to elevated interest rates, geopolitical uncertainty, construction cost pressure, and continuing affordability constraints. Housebuilders have slowed programmes where sales rates no longer support the pace of planned construction.

The capital’s result will now be tested across the remainder of the year. A sustained increase would indicate that delayed projects are moving through regulatory and commercial stages, while a reversal would suggest that the second quarter was shaped by the registration of a small number of large schemes.

Regulatory throughput remains central to London delivery

The London figures will be examined for signs that delays within the Building Safety Regulator’s Gateway 2 process are beginning to ease. Higher risk residential buildings cannot begin defined building work until the relevant design information has passed regulatory assessment, directly linking approval capacity with construction starts.

Project teams have been adapting submissions as the regulator’s expectations become clearer, although complex schemes continue to require extensive coordination across structure, façades, fire strategy, services, evacuation arrangements, and construction control. The same regulatory environment is shaping programmes such as the £120m Portsmouth tower remediation framework, where design approval, resident safety, and phased works must be aligned across occupied buildings.

Regulatory progress alone will not restore London housing output. High land values, finance costs, affordable housing obligations, extended preconstruction periods, and complex procurement can prevent a consented development from reaching a viable construction contract.

Tall residential buildings remain especially sensitive because their cost base includes complex façades, vertical transport, fire systems, smoke control, structural transfer, logistics, mechanical and electrical services, and lengthy commissioning. A relatively small movement in borrowing or construction cost can alter the economics of a programme lasting several years.

The comparative stability of affordable and build to rent registrations reflects the different funding structures within the housing market. Private sale development depends heavily on mortgage affordability and buyer confidence, whereas rented and affordable programmes may draw on institutional funding, public subsidy, or long term landlord investment plans.

Neither sector is protected from viability pressure. Registered providers must balance new construction against repairs, fire safety, damp and mould, energy improvement, and existing debt, while build to rent investors still require rents, yields, finance, and construction cost to support the completed valuation.

The steep regional declines will affect local supply chains before they become visible in completion statistics. Groundworkers, bricklayers, roofing contractors, plant hirers, merchants, and materials manufacturers depend on continuity of site starts, and a sharp loss of workload can remove capacity that is difficult to restore when demand returns.

Manufacturers serving private housebuilding are already experiencing lower volumes in bricks and other products tied closely to new estate construction. Regional subcontractors face a similar planning problem when the national market weakens but activity remains concentrated in selected cities, tenures, and large developments.

Housing demand remains high, but demand alone does not create construction output. Sites require viable finance, deliverable planning conditions, available infrastructure, regulatory approval, a functioning sales or rental market, and contractors willing to accept the commercial terms.

The second quarter therefore presents an uneven market rather than a national recovery. London has produced a substantial rebound from a depressed base, while private registrations remain lower and half of the UK’s regions have contracted.

The durability of the capital’s improvement will depend on whether registrations translate into continuous site activity. Approval throughput, programme viability, funding, and sales will determine whether the increase releases a larger pipeline or remains a temporary concentration of projects delayed from earlier quarters.