Taylor Wimpey has ruled out starting new developments in London once its existing projects are completed, in a fresh warning over the viability of housebuilding in the capital. Chief executive Jennie Daly said the economic case for taking on new schemes had effectively disappeared.
The decision adds to mounting pressure on London’s housing targets. The government requires 88,000 new homes a year in the capital – equivalent to 22,000 every quarter. Yet figures from residential development consultancy Molior show construction started on just 2,876 homes during the second quarter of 2026.
Developers retreat from London
Taylor Wimpey is not alone in reassessing its exposure to London and the South East. Vistry announced last month that it would exit open-market housebuilding in the South East as part of a wider restructuring. Meanwhile, the Home Builders Federation has warned that London has become a “no-go zone for housing investment”.
Developers have pointed to a combination of weaker buyer demand, higher construction costs and planning requirements. Mortgage rates have also increased pressure on affordability, particularly given London’s higher property prices. Stamp duty costs and weaker overseas demand have created further challenges. Daly also highlighted the cost of regulations requiring a second staircase in residential buildings over 18 metres.
Affordable housing requirements under fire
London’s affordable housing rules have become another source of tension between developers and City Hall. The mayor’s planning framework requires developments using its fast-track route to provide at least 35% affordable housing, subject to the relevant policy requirements.
Daly also criticised late-stage viability reviews. These can result in developers making additional affordable housing contributions when schemes generate stronger returns than originally forecast. She said: “If it proves that I have made a good bet, effectively, and invested well and my scheme is profitable, I’d have to increase the level of [affordable housing] contribution. I think for many, that has just proven too ambitious.”
The warning comes days after Berkeley Group criticised the planning system following the rejection of its plans for hundreds of homes at the Aylesham Centre in Peckham. Berkeley chief executive Rob Perrins said the decision highlighted the “gulf between positive planning policies and what actually happens when you try to build homes in London”.
Pressure mounts on housing targets
Taylor Wimpey’s decision raises further questions over how London can accelerate housebuilding when major developers are reducing their exposure to the capital. A spokeswoman for mayor Sadiq Khan told The Times that he was “doing everything he can to deliver more homes” and recognised the challenges facing housebuilders.
The government is also seeking to stimulate demand through measures aimed at first-time buyers. But for developers, the more immediate issue is whether new schemes can generate sufficient returns to justify the risks and costs involved. For Taylor Wimpey, Daly’s answer is clear: once its current London pipeline is finished, it does not intend to start more developments under existing conditions.
