New research figures show the number of new build homes being purchased before construction was completed fell last year, with only a third of new homes being sold off-plan in 2020. Find out more…
Research findings
The figures, which come via research from Hamptons Off-Plan Sales Index, show that one in three new build completions (33%) were sold off-plan last year. The share of new homes in England and Wales being sold off-plan has been steadily falling since a peak of 39% in 2016 when 69,000 new homes completed were sold off-plan. Last year’s figures of 33% equates to 49,000 new homes being bought off-plan, down from 35% in 2019. And all this despite the stamp duty holiday which was announced part way through the year last year.
Flats vs Houses
Looking at the figures, the decrease in numbers showed fewer flats were sold off-plan, while there were more houses sold this way. Comparing the figures to those from 2019, the number of flat completions sold off-plan fell from 58% in 2019, to 50% in 2020. However, houses performed slightly better. Off-plan house completions rose from 29% in 2019 to 30% in 2020.
Generally, new flats are always more likely to be sold off-plan than houses. And when it comes to where the most houses are sold prior to completion, London historically sells more than anywhere else in the country. Last year, over half (52%) of new homes completed in London were sold off-plan.
What’s driving more houses being sold off-plan?
The quest for more living space in more rural settings has had a lot to do with it, as people look to move out of the city post-pandemic. It’s always more likely to be investors who buy off-plan be that during or pre-construction, however there are fewer investors in the market at present. Hamptons Senior Analyst David Fell explains that, “Owner-occupiers have proved increasingly likely to commit to a house off-plan, although typically this tends to be months rather than years before completion.” He added: “The introduction of the 3% stamp duty surcharge in 2016 proved a tipping point. Since then, fewer homes have been sold off-plan.”
Regions split by completions sold off-plan
The Off-Plan Sales Index combines new home sales data from Hamptons and the Countrywide Group, with figures from Land Registry to make the calculations.
You can see the percentages split by region, of the new home completions sold-off plan in 2020, according to Hamptons, below:
– London, 52%
– North West, 42%
– North East, 35%
– Wales, 34%
– West Midlands, 31%
– East Midlands, 30%
– East of England, 27%
– South East, 26%
– Yorkshire and the Humber, 22%
– South West, 22%
If you are a housing developer looking to market new home developments to a receptive buying audience, and increase the chance of selling off-plan, contact us today to list your properties with us.
Or, if you are a buyer looking for a brand new home to buy off-plan, start your property search with us here.
