SPECIAL FEATURE: ‘Decisive’ buyers still keen to upgrade to a new-build home – WhatHouse?

SPECIAL FEATURE: Daniel Hill, Managing Director of whathouse.com, has written an article discussing why ‘decisive’ buyers are still keen to upgrade to a new-build home.

Data from Whathouse? – the UK’s leading new home audience platform – shows the fundamental drivers behind the house-building sector remain positive

As mortgage affordability, interest rate increases, and cost-of-living challenges contribute to a nationwide decrease in the number of people searching for new-build properties Daniel Hill considers the implication for UK housebuilders.

There is no doubt that the escalating cost of living is affecting mortgage affordability – yet housebuilders are reporting that the number of people actioning plans to move to a new-build home remains strong. Figures released earlier this month in the whathouse.com New Home Index backed this up, revealing that the market may have lost its ‘froth’ but demand for new homes continues to hold up well. A positive sign that the fundamental drivers behind the sector remain positive.

According to the data, the total number of people searching for new-build properties is down -14% in June compared to May, but serious home-hunters are holding strong and the number of people requesting development information remains reassuringly static against 2021 levels.

In addition, long-held plans to move, lower maintenance costs, and increased energy efficiency continue to drive retirees interest in new-build retirement homes. Confidence in the market remains strong as multiple regions across the UK experienced an increase in the number of people searching in May than in June, with Scotland up +63%.

And, while the end of the Help-to-Buy scheme means first-time buyer interest is dropping (down -31% nationally in June), interest in Part-Buy, Part-Rent (Shared Ownership) is on the rise (East of England leads with a +39% increase in June compared to May), driven in part by housebuilders provision of incentives and affordability enablers.

There is no getting away from the fact that the economy is under extreme pressure and the slowdown is being felt everywhere, but the need for new housing is not going to go away. Any predictions about a collapse in the housing market are extremely premature. As whathouse.com New Home Index lead data shows, quality new home-buyers are still there, we’re hearing from housebuilders that they’re still seeing significant interest and are achieving successful sales. With incentives and affordability enablers being offered by housebuilders, we predict the market will steer away from a major slowdown.

Considering the number of people searching for new-build homes compared to the pre-pandemic average, demand is still healthy compared to the historic ‘normal’. More importantly, we are also seeing that lead levels (people requesting further information relating to a particular development) are holding strong and I’m hearing from housebuilders that they’re still seeing significant interest and are achieving successful sales.

As we enter the second half of the year, I anticipate further slowdown in people’s search for new-build properties, particularly given worsening mortgage affordability, interest rate increases and cost-of-living challenges. I expect this to impact the number of people searching in the early ‘awareness’ stage most noticeably. However, I predict that interest from decisive buyers in the later ‘consideration’ and ‘decision’ stage will hold steady, given that new-build homes are storming ahead of second-hand properties when it comes to consumer confidence, lower running costs and life-style desirability.

At the mid-year point, housebuilders can look back confidently as having had a strong 2021/22, and house price inflation has – there or thereabouts – managed to cover the hike in building material costs.

The economy is under extreme pressure and the slowdown is being felt everywhere, but the need for new housing is not going to go away. Any predictions about a collapse in the housing market are extremely premature. The industry will see a cooling in search through the rest of 2022 as there is less froth in the market. However, as lead data shows, quality new home buyers are still there and with incentives and affordability enablers being offered by housebuilders, we predict the market will steer away from a major slowdown.

At Whathouse?, we anticipate housebuilders will experience a finally flurry of Help to Buy interest in London, as apartments are fast-tracked for completion by the December deadline. Overall, housebuilders are likely to deliver strong performances by year end and with a fair wind they can navigate the continuing supply chain issues and rising costs.

SPECIAL FEATURE: ‘Decisive’ buyers still keen to upgrade to a new-build home - WhatHouse?

Daniel Hill, whathouse.com

Written by Daniel Hill, Managing Director, whathouse.com

About WhatHouse?

Whathouse.com is the UK’s leading new home audience platform. For more than 30 years, its aim has been to inspire UK homebuyer decisions around new property. With a comprehensive directory of over 7,000 new homes, from the UK’s most celebrated housebuilders, WhatHouse? makes it easy for buyers to consider the diverse range of property types and tenures available and to find their perfect new home match. The annual WhatHouse? Awards started back in 1980 and is dubbed “the Oscars of the housebuilding industry”.