The London Slowdown

Damned by a Trickle – 26 April 2026

Over the last couple of years construction of new housing in London has, in the words of John Burn-Murdoch, slowed “to a trickle”. The building spree which has seen clusters of new residential towers sprouting around the city has stopped or, as The Telegraph noted in March 

…housebuilding has collapsed. Just over 4,100 new homes were started in the capital in 2024-25, down 72pc on 2023-24. Developers have warned that without stronger buyer appetite, London’s new-build pipeline will continue to shrink. 

Plans for many more towers exist of course but economic conditions are no longer right for backers to execute them. The government hopes with deregulation work will resume. 

Although its fall from grace seemed final in the 70s, high rise housing has made a big comeback since the early 2000s. Planning permission for hundreds of residential towers in London has been granted in the 21st century. Building homes (and student accommodation) in high rise blocks on big, windfall sites is the signature of a growth coalition between developers and politicians. The aims are 

• more homes on less land
• economic growth 
• foreign direct investment (FDI)

High rise is a key marker of an investable project for foreign investors. The shape of modern London is linked – some might say “obviously” – to the willingness of foreign investors to buy off plan, and their appetite to do so is strengthened by perceived liquidity of standardised residential high-rise. Jeb Brugmann lamented this commodification in the book “Welcome to the Urban Revolution” (2009)

…industrial batch production has been taken to its logical conclusion: growing numbers of large and small investors have participated in the commodification of the city, producing, purchasing, and flipping generic units (i.e., square feet) of “city” for speculative purposes

Selling UK assets to foreign buyers is what Mark Carney called “relying on the kindness of strangers”. Without it, the pound could devalue sharply. Given the UK’s reliance on energy and food imports for example, building towers all over London might be said to keep Londoners warm and fed because it safeguards the buying power of the pound in their pocket. However, Carney was not recommending relying on the practice.

Postwar high rise had nothing to do with FDI or shoring up the pound. The difference is more than economic. Today’s clumps of residential towers are closely packed contradicting the postwar commitment to using towers to free up the ground as parkland or for low and mid-rise family homes, often including houses, a practice known as “mixed development”. Mixed development is exemplified by anonymous estates built in Camden before Sydney Cook came along with his principled rejection of tall buildings. West Kentish Town, Wendling, Bacton, Denton, plus the better known Barrington Court, are estates in Gospel Oak which feature a single tower block or slab surrounded by low-rise. 

Although mitigating the trade deficit with capital inflows from foreigners buying up London’s formulaic residential “product” is not an explicit aim of planning policy, it surely affects the regulatory and political environment in which decisions are taken about development. 

There are complicated issues here that are beyond my powers of analysis. But, there are some things worth saying if only because they beg questions of those with answers. First of all, the complicated construction of high rise residential towers relies a lot on imported goods which lessens the benefit of selling the end product to foreign buyers. In other words, there’s a growing UK trade deficit in construction materials and components. The Stay Club building on Holmes Road in Kentish Town provides accommodation for foreign students (good for the balance-of-payments) but all its 358 lettable student rooms were imported as pre-fabricated, pre-furnished bedroom pods from China. The same company’s 19-storey Colindale complex has nearly 600 pods.

Secondly, UK cities hawk their “investable projects” to foreign investors all the time. The bizarre Opportunity London website hints at desperation for international capital. Meanwhile, the recent Centripetal Cities report on Manchester’s residential densification shows foreign asset ownership generates revenue which does not make Mancunians richer even as the sale of UK land for development might mitigate the trade deficit.

Lastly, there is a question about spatial planning and UK industrial policy. Current orthodoxy focuses on “site optimisation” but leads to the failing high rise model. The impasse should be recognised as a function of the complexity of high rise buildings which rely on ever more imported finished products, and our town planning culture which lacks a prescription for sensible urbanisation for our times.

A shift away from high rise densification with its import-intensity towards a new housing stock based on simplified construction and a different approach to urbanisation is needed. We need a new idea about an appropriate domestic building type for a new wave of urbanisation in our country – a robust formula to fit our budget .

And before the “compact city” is used to argue for sticking with commoditised residential high rise, we might acknowledge that consumption is the issue, not built form. In other words, the densification of London won’t deliver more sustainable life-styles but guarantees construction becomes more expensive and more difficult. 

Our town planning is productivist without either an industrial strategy or a plan for sensible and achievable urbanisation.

[Editor adds: this post by Tom Young starts what we hope will be debates on key issues raised in the Just Space Alternative Plan for London as a caring City. Submit via email or comment below. ]

Left image by Tom Young, right image from a developer’s marketing site.