CoStar data reveals a widening gap between the capital and UK regions in commercial property construction.
London now accounts for nearly three-quarters of all UK office space currently under construction.
Preliminary data for the second quarter of 2026 indicates a significant shift in the UK property market. Annual office construction starts have dropped below five million square feet. This figure marks the lowest level recorded since at least 2010.
The current numbers contrast sharply with the 16 million square feet seen in 2019. Consequently, regional construction starts have fallen nearly 59% below the ten-year average. London also experienced a decline of 57% compared to historical norms.
Patrick Scanlon of CoStar Europe notes that rising rents for premium London spaces encourage speculative development. These projects specifically target central areas offering excellent amenities. Therefore, the capital maintains a stronger appeal for developers than regional hubs.
Total office space under construction actually increased during this quarter. This trend persists because completion levels remained low during the first half of the year. However, experts expect this growth to reverse quickly.
Scanlon predicts a faster downward trend for construction levels during the remaining months. Nearly one-third of current projects will finish by the end of the year. Meanwhile, new starts are unlikely to keep pace with these completions.
The divide between London and the rest of the UK continues to widen significantly. In 2021, the capital represented half of all ongoing office construction. By mid-2026, London’s share reached almost three-quarters of the national total.
Regional construction has plummeted below six million square feet. This volume represents only 0.5% of the total regional office stock. In contrast, London maintains a much higher ratio of 3.7% for similar developments.
CoStar Group provides these insights as a global leader in real estate analytics. The company manages various major brands including LoopNet and Apartments.com. It continues to digitise property data to empower businesses worldwide.
(Source: businesswire)
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