London

Overview

London experienced a poor period for project-starts and main contract awards, with their value decreasing against 2022 levels. Detailed planning approvals, on the other hand, experienced a small boost against the previous quarter and previous year.

Totalling £3.187bn, work starting on-site in London during the quarter to March fell 25 per cent against the preceding quarter to stand 53 per cent down on a year ago. Major work (£100m or more) starting on-site fell 46 per cent against the preceding quarter and slipped back 65% compared with last year’s levels. Underlying project-starts (less than £100m in value) fell 28 per cent during the quarter on a seasonally adjusted (SA) basis and the value decreased 42 per cent on the previous year to total £1.972bn.

At £4.682bn, main contract awards in London increased 7 per cent during the quarter to March, to stand 12 per cent lower than the previous year. Underlying contract awards, with the value declining 6 per cent (SA) against the preceding quarter and 24 per cent against the previous year, added up to £2.185bn. Major project contract awards totalled £2.497bn, a 40 per cent increase compared with the preceding quarter and a 4 per cent rise against the previous year.

Detailed planning approvals in London grew 16 per cent against the preceding quarter to stand 5 per cent up on the previous year to total £5.315bn. Major project approvals, at £2.829bn, climbed 57 cent against the preceding quarter and 14 per cent against a year ago. Underlying project approvals declined 9 per cent (SA) against the preceding quarter and 5 per cent against the previous year to total £2.486bn.

Sector Analysis – Project-Starts

Offices accounted for 33 per cent of the value of work starting on-site in London during the quarter to January, with the value of work adding up to £1.059bn, making it the most active sector despite a 14 per cent decline compared with the previous year. Project-starts included the £450m “EDGE London Bridge” development (Project ID: 19015864). Private housing project-starts, adding up to £952m, fell 71 per cent against the previous year, accounting for 30% of work commencing on-site in London, Social Housing project-starts decreased 68 per cent against the previous year to total £372m, a 12per cent share of the total value.

On the other hand, community & amenity experienced a relatively strong period, with the value of project-starts climbing 90 per cent against 2022 levels. The value of project-starts totalled £449m during the period, a 14 per cent share of the total value. Utilities at £26m, experienced triple-digit growth (+130 per cent) to account for 1 per cent of the total value.

Value of Project-Starts in London during the quarter to March 2023 by Sector

Sector Analysis – Detailed Planning Approvals

Private housing was also an active sector for detailed planning approvals, accounting for 30 per cent of the total value. This was despite the value falling 39 per cent against the previous year. Private housing consents totalled £1.585bn and included the £600m, 867-flat development in Ealing, London (Project ID: 22456618). Social Housing at £913m followed a similar trend, here the value of planning approvals fell 12 per cent against the previous year to account for 17 per cent of the total value.

On the other hand, offices experienced a relatively strong period, with the value of project approvals climbing 167 per cent against 2022 levels. The value of approvals totalled £1.4bn during the period, a 26 per cent share of the total value. Community & Amenity experienced one of the sharpest increases in detailed planning approvals, experiencing a four-digit increase against the previous year to total £546 million. However, this growth was almost exclusively due to the £500m British Library extension project (Project ID: 15291949).

Value of Project Approvals in London during the quarter to March 2023 by Sector

Forecast Construction-Starts for London

Note: Underlying projects are schemes with a construction value of £250,000 to £100 million.  Forecast updated in April 2023 p – provisional, f – forecast.
Source: Glenigan