The number of off-plan home sales in England and Wales has plummeted to its lowest level in 12 years, according to new data from the UK's largest property website, Rightmove. In 2023, just 34% of new homes were sold before construction was complete, down from 55% in 2019. This decline marks a significant shift in the UK's housing market, where buyers are increasingly cautious in the face of rising mortgage rates and stagnant prices.
Rightmove's data reveals that the average price of a new home sold off-plan in England and Wales is £342,000, with prices ranging from £180,000 in the North East to £450,000 in London. However, the North West of England saw the largest decline in off-plan sales, with just 22% of new homes sold before construction was complete.
The decline in off-plan sales has significant implications for the UK's housing market. First-time buyers, who often rely on off-plan sales to secure a mortgage, are now facing increased competition from cash buyers and investors. Landlords, who have been active in the off-plan market in recent years, may also struggle to find suitable properties to purchase.
Existing homeowners, who have seen their property values stagnate in recent years, may benefit from the decline in off-plan sales. However, the lack of new homes being sold off-plan could exacerbate the UK's housing shortage, particularly in areas where demand is high.
The UK government's Help to Buy scheme, which provides subsidies to first-time buyers purchasing new homes, has also been affected by the decline in off-plan sales. With fewer new homes being sold off-plan, the number of Help to Buy purchases is likely to decline, potentially exacerbating the UK's housing shortage.
In response to the decline in off-plan sales, property experts are urging the UK government to take action to stimulate the housing market. This could include measures to reduce mortgage rates, increase the availability of affordable housing, and provide greater support for first-time buyers.