Sale of new properties slumps to ten-year low
Research from the Warwick Estates, which analyses data from the government’s UK house price index, showed that in 2010 new build homes accounted for 9.6 per cent of sales, rising to 13 per cent in 2019.
However, in 2020 only 8.8 per cent of sales were new builds, a fall of around four per cent on the previous year, which is the biggest annual decrease in a decade.
All regions bar Northern Ireland saw falls in new build sales, with the largest taking place in North East, which fell by 6.3 per cent.
This was followed by East England with a 5.2 per cent decrease and North West with a five per cent reduction.
Northern Ireland new build sales rose 0.5 per cent in 2020 to 18.3 per cent.
Warwick Estates partially attributed the fall in new build sales to the Covid-19 pandemic, which limited construction and delayed projects.
The firm said the introduction of the EWS1 form in 2019, which aims to ensure external cladding on high rise buildings is safe, had created backlogs in sales as there were few professionals who could complete inspections.
Consequently, home purchases could not be completed without the certification leaving many borrowers in the lurch and reducing the number of new build transactions.
Warwick Estates’ chief operating officer Bethan Griffiths said: “A huge level of buyer demand spurred by the stamp duty holiday has helped revive buyer demand, but such unprecedented levels of market activity have seen resources stretched and, while homes are going under offer at an alarming rate, there have been substantial delays during the back end of the transaction process.”
She added that the EWS1 forms has been “extremely difficult” to get, with delays of six months of more in some cases.
Griffiths said: “Despite attempts to remedy the situation by removing the requirement on buildings of 18 metres or less, we’re yet to see any real headway being made and the issue continues to prove problematic for those operating within the industry.”