The latest figures by the National House Building Council (NHBC) show the new-build sector is bouncing back with the number of registrations and completions increasing.
Throughout Q2 2020, there was a slump in new-build registrations due to COVID-19 lockdown restrictions. Then, in Q3 and Q4, there was a strong recovery. The latest figures from NHBC, the UK’s leading new home warranty and insurance provider, show the sector has bounced back.
In the first quarter of 2021, 36,863 new-build homes were registered by builders. This is a 10% increase compared to Q1 2020 when 33,388 homes were registered. Nine out of 12 regions across the UK recorded a rise in registrations during the first quarter of this year compared to the previous year. This shows most of the UK is seeing growth in the number of new-builds being registered.
Registrations in the private sector saw a strong jump with a 10% rise from Q1 2020 to 26,985. New homes registered in the rental market also increased by 13% to 9,878. This illustrates the significant growth and investment happening in the build-to-rent sector.
Steve Wood, NHBC’s CEO, comments: “It is encouraging to see that new home registrations at the start of 2021 have overtaken registrations from the same time last year.”
“Increased new home registrations reflect growing confidence amongst builders, most of whom are forward sold through the summer. Allied to continued investment in Build to Rent, this suggests a strong outlook for the new-build sector in the year ahead.”
Increasing demand for new-builds
Demand has been increasing for new-build properties among homebuyers and property investors. Recent data from BuildScan revealed 38.7% of all new-build properties are currently sold subject to contract or are under contract.
The stamp duty cut for properties valued at £500,000 or less has been in place since July 2020. Through this, some buyers have been able to look at pricier homes. This tax holiday could be a factor of why new-build enquiries have been high since last summer. New-builds tend to be more expensive than existing homes, so the stamp duty savings are likely allowing more buyers to purchase new homes.
Additionally, there are numerous benefits of buying new-builds. This includes no chain when buying the property, potential incentives from the developer and 10-year warranties providing peace of mind. All of the fixtures, fittings and decor are also brand new and modern, and the properties are cheaper to run with higher green standards.
Growing confidence in housebuilding
The new-build sector is playing a part in the current housing boom. With buyer demand increasing across the UK housing market and a lack of supply, there is still a strong need for more housing. The government is targeting a goal of delivering 300,000 new homes a year by the mid 2020s.
From Q1 2020 to Q1 2021, new-build completions increased by 4% from 31,652 to 33,074, according to NHBC. The UK housebuilding sector has also seen a rise in workloads and output volumes. This sector is even leading growth across the construction industry.
UK housebuilding has remained particularly resilient throughout the COVID-19 pandemic. With such a strong appetite for new-build properties, confidence is increasing in the housebuilding sector. And confidence will likely increase further with lockdown restrictions easing and the further rollout of the vaccination program.
Paul Edwards, senior regional director of NHBC, says: “We simply cannot build quickly enough” is a phrase we are frequently hearing. From rural developments to more central locations, sales remain positive and there is no apparent sign of a downturn in housing demands.”