Official government figures released this week show that the amount of new build homes being built in the UK has risen by 21%, indicating that there is no slow down in the demand for buying new properties….or, is this just wishful thinking from the developers?
The latest figures from the Department for Levelling Up, Housing & Communities, show that the number of new build properties under construction was 51,730 between 1st of April and 30th of June this year. That’s a 21% increase compared to the previous quarter and a 15% increase compared to the same quarter in 2021. The government data also shows that 44,940 properties were completed between April and June 2022, a 3% rise compared to the previous quarter and up 6% compared to the same period last year.
From the beginning of the year until 30 June 2022, there were estimated to be 180,820 new build properties built, a 5% increase compared to figures at the end of June 2021. In total there were 62,910 energy performance certificates (EPCs) lodged for new build dwellings in the 13 weeks to the week commencing 5 September this year, a 5% increase from the 13 weeks to the week commencing 6 September last year. In the year ending June 2022, 243,200 new dwelling EPCs were lodged, which represents a 4% decrease when compared to last year.
So, what can we draw from these figures? On the outside, it looks like new builds are thriving and the demand for them is going through the roof. But, is this true? We hope so, but if the current forecast of the property market is anything to go by, this could just be a red herring from the developers. As the cost of living goes up and mortgage interest rates are higher than they have been in years, the overall amount of people looking for properties and new mortgages is decreasing. So why are the new build figures increasing?
Perhaps the developers are building new properties in hope of an upturn in the market relatively soon? It would make sense, after all, the builders have quotas to fill and staff to provide work for so why not get all the properties completed and built ready for when the market returns to pre-pandemic and pre-recession levels? I also find it difficult to believe that with the removal of the help to buy scheme next month, that the demand for new build properties has increased. If anything, you would expect it to decrease as there is not currently any scheme in place to replace it. The help to buy scheme is a scheme that has ran in various form over the last 9 years, designed to help people purchase new build properties that might otherwise be out of their budget.
The scheme is due to end next year but will stop accepting new applications in the next few weeks. Yes, a few people may be rushing to purchase using help to buy but in reality, most developers have already stopped building and offering help to buy specific properties so the amount of applications would have already dropped significantly. I do believe that these figures released by the government are potentially wishful thinking on the developer’s part but, I hope the dreams do become reality again soon and the market returns to a normal place.
If you or anyone you know is interested in purchasing a new build property, please feel free to give us a call today to see how we can help.