First Time Buyer
Off-plan home sales soar amid lack of property supply
The lack of available properties for sale pushed more home hunters into buying a property on spec in 2021, according to estate agent Hamptons.
Off-plan sales peaked in 2017 making up almost half of new home sales, but declined after that until last year.
Demand for houses drove the sales while fewer flats were sold off-plan in 2021 than in 2020, the analysis showed.
For the first time since 2007, terraced homes were more likely to be bought before completion than flats.
Last year, flats accounted for 37% of all homes sold off-plan, down from a peak of 53% in 2016, and 69% in 2008.
Larger developments saw the highest share of homes sold off-plan with the Cotswolds seeing the highest numbers of homes built off-plan.
David Fell, senior analyst at Hamptons, 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 added: “After nearly four years of falls, the rise in 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.”
Related: See YourMoney.com’s The pros and cons of buying a property off-plan for more information.