More homes sold off plan in 2021 amid lack of existing properties
Written by First Choice Radio on 27 March 2022
That’s according to estate and lettings agent Hamptons
The proportion of homes sold “off-plan” increased in 2021, reversing a downward trend seen in recent years, according to analysis.
Some 37% of new homes sold in England and Wales found a buyer before completion, up from 35% in 2020, estate and lettings agent Hamptons found.
While this figure is still below a 47% peak recorded in 2017, it reversed the subsequent downward trend, Hamptons said.
For the first time since 2007, a terraced house was more likely to be sold off-plan than an apartment, it found.
Nearly a quarter (24%) of new detached home completions in 2021 were sold off-plan compared with 21% in 2020.
For semi-detached properties, the figure rose from 31% to 33% and for terraced homes the proportion of off-plan sales increased from 41% to 45%.
The proportion of flats sold off-plan meanwhile fell from 50% to 44%.
Off-plan purchasers are increasingly likely to be owner-occupiers seeking houses rather than flats, Hamptons said.
David Fell, senior analyst at Hamptons, which looked at Land Registry data, said: “The lack of second hand homes available to buy has meant that owner-occupiers are increasingly turning to new builds, with more willing to buy off-plan in the face of limited options on the market.
“Typically, these are chain-free homeowners who have more flexibility on moving dates.
“Despite this, owner-occupiers don’t buy as far in advance as investors who are often happy to wait a year or two, particularly when prices are rising.
“They’re also more likely to seek out bespoke, individually designed houses in smaller schemes, rather than flats in big city centre blocks.”
He said the rise on off-plan sales “will provide respite for developers looking to maintain sales rates as Help to Buy winds down.
“Whether this shorter-term shift has the potential to turn into a longer-term trend remains to be seen, but unlike the past, it’s owner-occupiers rather than investors who are likely to continue driving off-plan sales in 2022.”
New build buyers often hand over a standard 10% deposit on exchange of contracts, with the balance payable on completion.
Last year, buyers collectively paid £1.1 billion in deposits to developers for homes that had yet to be built, Hamptons calculated.
This is around three times the £348 million handed over in 2007.
Published: by Radio NewsHub