London Housing Market Suffers Sharp Decline as UK Registrations Rise
The London property market experienced a significant setback in 2025, with new home registrations plunging by 27% according to the latest industry data. This dramatic decline occurred despite an overall increase of 11% in new home registrations across the United Kingdom, highlighting a stark regional divergence in housing market performance.
National Growth Masks London's Struggles
The National House Building Council (NHBC), which holds over 70% of the UK warranty and insurance market for new build homes, recorded 115,350 new home registrations nationwide in 2025. This represents a substantial increase from the 103,669 registrations recorded in the previous year, suggesting growing activity in most regions.
However, London's performance tells a different story. The capital saw just 4,723 new home registrations in 2025, a sharp decline from the 6,451 recorded in 2024. This 27% annual decrease stands in stark contrast to the positive trends observed in other parts of the country.
Regional Variations Across the UK
The NHBC's detailed regional breakdown reveals significant variations in housing market performance:
- West Midlands led the way with an impressive 29% increase in registrations
- Eastern England followed closely with 24% growth
- East Midlands and South West both recorded 17% increases
- North West and Yorkshire and the Humber saw 11% growth each
- South East experienced a more modest 7% increase
- Scotland and North East both recorded 4% growth
- Wales saw a 10% increase
- Northern Ireland and Isle of Man recorded minimal growth at 1%
Sector Performance and Market Challenges
The private sector showed stronger growth than the rental and affordable sector, with private registrations increasing by 12% to reach 75,227 compared to 67,265 in 2024. The rental and affordable sector saw a 10% uplift, with 40,123 new homes registered in 2025 compared to 36,404 in the previous year.
Daniel Pearce, corporate strategy director at the NHBC, commented on the market conditions: "Our latest figures show increased home building activity, although the volume of new homes built remains below long-term averages. Whilst there are some tentative signs of conditions improving for developers to build homes, fragile consumer confidence, affordability challenges and economic uncertainty continue to impact demand."
Apartment Registrations Decline Nationally
Across the UK generally, there was a 2% annual fall in new apartment registrations, with 16,631 registered in 2025 compared to 16,937 in 2024. The NHBC suggested this decline is likely linked to ongoing affordability challenges, particularly affecting London where apartment construction forms a significant portion of new housing supply.
Mr Pearce elaborated on London's specific challenges: "We're increasingly hearing of house builders reducing their operations in London, citing regulatory challenges and cost. Set against a decline in affordable housing delivery and a backlog of building control applications, it is unsurprising apartment registrations fell in 2025."
Completion Figures and Future Outlook
The NHBC also released figures for new home completions, which fell by 2% annually last year. Some 122,012 completions were recorded in 2025, compared with 124,272 in 2024, indicating that while registrations have increased, the actual delivery of completed homes has slightly decreased.
Looking ahead, Mr Pearce identified key areas for improvement: "Accelerating planning reforms and addressing the skills shortage will help house builders deliver quality new homes, but resolving affordability challenges for home buyers remains the key to unlocking demand and boosting house building activity."
The contrasting performance between London and other UK regions highlights the complex challenges facing different parts of the housing market, with regulatory pressures and cost concerns particularly impacting development in the capital.
