More than half of the 1,900 ultra-luxury apartments built in London last year remain unsold, sparking fears that the capital will be left with dozens of 'posh ghost towers'. The swanky flats, complete with private gyms, swimming pools and cinema rooms, are lying empty while hundreds of thousands of first-time buyers struggle to find affordable homes.
The total number of unsold luxury new-build homes, rarely advertised at less than £1 million, has hit a record high of 3,000 units, according to property data experts Molior London. Rich overseas investors, for whom the flats were built, are turning away due to Brexit uncertainty and a hike in stamp duty on second homes.
Builders started work on 1,900 apartments priced at more than £1,500 per sq ft last year, but only 900 have sold. A typical high-end three-bedroom apartment, covering around 2,000 sq ft, would cost £3 million. An additional 14,000 unsold apartments are on the market for between £1,000 and £1,500 per sq ft.
Molior says it would take at least three years to sell the glut of ultra-luxury flats if sales continue at their current rate and no further new-builds are started. However, developers have a further 420 residential towers (each at least 20 storeys high) in the pipeline, says New London Architecture and GL Hearn.
Henry Pryor, a property buying agent, says the London luxury new-build market is 'already overstuffed but we’re just building more of them'. He warns of 'loads of empty and part-built posh ghost towers', originally built as 'gambling chips for rich overseas investors' who have now 'moved on'. Developers have failed to sell homes despite offering discounts, incentives and freebies, including furniture and even cars.
Steven Herd, founder of MyLondonHome, says his firm is struggling under the weight of overseas investors desperate to sell. He cites Asian investors who bought off-plan in 2015-16 hoping to flip for profit but instead lost hundreds of thousands of pounds. He argues London needs 'affordable' one- or two-bedroom apartments priced at £500,000, not '£1.5m-£2m-£3m flats that all look the same'.
