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£60bn pipeline for luxury London homes but construction lags behind

The number of luxury homes currently being planned or under construction in London hit a record high this year, with around £60bn of properties currently due to be delivered over the next decade, a 20% increase on 2013. However, with significant capacity issues at every level of the capital’s construction industry, a huge proportion of these properties are unlikely to be built on time, according to EC Harris’ Prime Resi report 2014.

This year, the capital’s ten-year pipeline of high-end property has grown by around a quarter to a record 25,000 homes. However, with developers and investors struggling to keep pace with seemingly insatiable buyer demand, up to half the new homes planned in the next five years could end up falling well behind schedule due to a lack of available contractors to deliver the required quality of work.

In terms of location, the South Bank is proving the most popular area of the capital for development, accounting for around a third of new projects; this is closely followed by Chelsea & Fulham and the City.

According to the report, some developers are being forced to pay premiums to contractors in order to secure their services. This rush to market has provoked significant price inflation in the construction sector as developers seek to urgently get building work underway.

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