New London housing is focusing on high-end prime properties

Developers are focusing on high-end properties, according to report that warns firms could be forced out of the capital

Developers are focusing on properties in London that cost more than £2m to buy or £5,000 a month to rent. Photograph: /Jason Hawkes

London's housing shortfall is running at more than 20,000 homes per year and too many of the properties under construction are aimed at wealthy buyers, according to research that warns of a growing affordability gap in the capital's new housing stock.

A report by estate agency Savills warned that businesses could be forced out of London because their workforces cannot afford accommodation, while overcrowding forces young professionals to live longer with their parents.

More than 50% of housing demand in London comes from households earning less than £50,000 year, according to Savills, but developers are instead focusing on high-end prime properties. These cost more than £2m to buy or £5,000 a month to rent, with many ending up in the hands of overseas investors.

"Builders' focus on wealthier, equity rich and credit-worthy buyers since the credit crunch means that a disproportionate amount of stock is being delivered at what we call 'new prime' levels," Savills said.

Opposition politicians accused the government of allowing useless homes to be built, while ordinary Londoners struggled to afford to stay in the capital.

 

Provided by London & Country for the Guardian