The supply of new housing developments entering the market has reached its lowest level in over nine years, according to new analysis by property portal Rightmove. This significant decline underscores the considerable obstacles facing the Government's pledge to deliver 1.5 million new homes over the course of the current Parliament.
Rightmove's data reveals that the number of new build developments listed for sale has not been this low since January 2017. This downturn is attributed by the property portal to a challenging trading environment for housebuilders and estate agents, largely due to sustained higher mortgage rates. Furthermore, the analysis highlights a persistent shortage of affordable homes in numerous regions across the country, exacerbating the difficulties for prospective buyers.
Despite an 85% increase in the total number of homes for sale across both new build and second-hand markets over the past four years, Rightmove maintains that a critical imbalance persists. There remains a notable scarcity of properties in desirable locations and at price points that are genuinely affordable for many buyers, particularly those looking to get onto the property ladder.
Ahead of the upcoming Autumn Budget, Rightmove is urging the Government to implement specific measures aimed at bolstering housing delivery. These recommendations include the removal of stamp duty for first-time buyers, a significant increase in investment for affordable housing initiatives, and the introduction of targeted support to assist more individuals in purchasing their first home.
Steve Mariner, Group Sales & Marketing Director at Barratt Redrow, commented on the situation, acknowledging the Government's progress in reforming the planning system to unlock more land. However, he stressed that increasing regulatory costs are impeding new home construction, while low customer confidence, elevated borrowing costs, and broader economic uncertainty are making it harder for first-time buyers. Mr Mariner highlighted the current absence of government support schemes for first-time buyers in England, suggesting a new scheme, with contributions from both developers and the Government, would stimulate the market, lead to more homes being built, and foster economic growth.
Alex Slater, Rightmove’s Director of New Homes, echoed these sentiments, emphasising the foundational role of first-time buyers in the entire housing market. He stated that affordability challenges are making it increasingly difficult for this crucial group to enter homeownership. Mr Slater called for a comprehensive set of reforms that are both swift and interconnected, ranging from stamp duty adjustments to greater investment in affordable housing, to improve the prospects for first-time buyers and maintain market momentum.