35,000 new luxury homes are set to be built in London over the next ten years according to property consultancy company Arcadis.
This is a 40% increase in luxury constructions from 2014 and represents a combined sales value of over £77 billion ($110 billion).
However a slowdown in demand and a rise in development costs could result in many residential luxury properties being turned into commercial offices, according to Arcadis.
The north of England and the West Midlands could also see a rise in demand as buyers look elsewhere for cheaper homes and investment opportunities.
This may help stem the increasing North-South property divide, which Business Insider previously reported on.
The chart below shows the total number of London homes currently in the pipeline:
The last couple of years have seen a significant slowdown in luxury properties in London, with prices in the wealthiest areas dropping 6.7% since 2014 and unlikely to grow in 2016. Many are putting this down to a rise in the stamp duty tax, which came into effect at the beginning of April.
This still hasn’t slowed down the capital’s lust for major developments — a New London Arcitechture report shows that a record 436 tall buildings over 20 storeys are currently being planned and constructed.
But there are signs that the property slowdown could become a full blown crash. In February property funds saw an outflow of £119 million, a huge turnaround from a year ago when they were one of the most popular asset classes on the market.