The London property market is not what it was 10 years ago. The combined effects of tightening planning regulations, legislative changes and broader economic uncertainty have eroded the development potential of land that once held promise.

Parul Scampion is chief operating officer at Fruition Properties

Sites that were viable a decade ago now struggle to meet minimum feasibility thresholds, while developers across the capital face mounting pressure to build within tighter profit margins and under greater risk.

Recent data from Molior brings the city’s long-overlooked property problems into sharp focus. Residential scheme starts have been steadily declining for years, but the pace of this downturn has accelerated alarmingly. Since March 2024, starts have fallen by 31% year on year, and Q1 2025 marked the lowest quarterly figure since 2009, with only 1,210 new homes started across all of Greater London.

Costs have risen, project timelines have stretched and risk profiles are growing increasingly severe. Regulatory shifts such as the 2022 Building Safety Act – which introduced stricter requirements for buildings over 18m, including a mandatory second staircase – have fundamentally diluted the viability of taller buildings by adding substantial holding costs as schemes navigate through the Building Safety Regulator’s gateways.

Coupled with broader economic instability, shaped in part by Brexit and Covid, the cramped market is squeezing SME developers, leaving many struggling to deliver as they once did. Regulatory pressures, compounded by supply chain issues and unreliable contractors, are turning occasional site setbacks into persistent, indiscriminate hurdles throughout the sector.

Pivoting to development management is the most logical adaptation and a natural evolution

Faced with these mounting pressures, developers are rethinking their strategies. While some persevere with the few projects that still stack up, more and more SMEs are turning to new markets, specialisms or client bases.

For us, pivoting to development management instead is the most logical adaptation and a natural evolution of over 20 years’ experience. We have long managed our own developments for a share of the profits and over the past decade have increasingly offered this service on a fee basis.

Vital service: development managers play a key role in liaising with stakeholders to keep projects on track

Development management allows us to gain a foothold in an increasingly slippery landscape, shape projects more strategically and continue to unlock value as the sector tightens its belt. But perhaps more importantly, by supporting banks, asset managers, family offices and other developers with existing, underperforming projects, these services provide everyone with a solution to the London property problem, by getting more projects moving again.

Across the capital, there are complex sites that require deep technical know-how: how to anticipate risks, clear bottlenecks, maximise value without cutting corners and adapt quickly when conditions change. With more and more developments encountering unforeseen obstacles and regulatory setbacks, development managers’ expertise and foresight are proving critical.

Human dynamics

However, the real challenge often lies not in the site itself, but in the people around the table. Technical experience is only half the job; a good development manager must also navigate the human dynamics. From clients to contractors, development managers grease the wheels, massaging each relationship to streamline development and keep every cog moving in the direction of progress.

For the capital’s SMEs, adaptability is second nature; survival depends on it. And with London again posing the age-old challenge ‘adapt or get left behind’, the choice is, as ever, clear.

With many sites stalled or struggling and new schemes increasingly unviable, we are not standing on the sidelines. Instead, we are leveraging our experience to help others’ projects move forward, offering development management alongside our own residential and commercial portfolio.

While this might all sound like doom and gloom, remember this: from its origins as the Roman settlement Londinium to its role as a medieval trading hub, through the devastation of the Great Fire of 1666 and the Blitz during the Second World War, London has always transformed itself in response to challenges and opportunities.

In 2025 and beyond, for those in the property sector, the question is what comes next and how can we work together to ensure vital projects continue to move forward.

Parul Scampion is chief operating officer at Fruition Properties