"Interest rates are now starting to ease and when they start to do so more substantially, we’ve no doubt that many buyer interest for new-build homes will climb once again"
- Jason Ferrando - easyMoney
New market analysis by peer-to-peer real estate investment platform, easyMoney, has looked at buyer appetite for new-build homes alongside the level of supply being brought to the market by developers in 20 major British cities.
Buyer demand takes a quarterly dip
The latest figures for Q3 2024 show that 18.8% of new-build homes listed for sale across Britain’s major cities had already found a buyer, sold subject to contract (SSTC).
This marks a -1.1% demand reduction since Q2 2024, and an annual decline of -1.2%.
Following on from a strong second quarter, Britain’s strongest new-build demand hotspot for Q3 2024 is once again Southampton with 43.2% of all listings being SSTC.
This is followed by Bournemouth (43.1%), Portsmouth (26.1%), Plymouth (26%), and Bristol (23.7%), demonstrating a dominance of coastal locations across the south of England.
The city in which demand has seen the strongest quarterly increase is Portsmouth where Q3 2024 saw an impressive demand increase of +11.8%
In total, 11 cities have recorded positive quarterly growth, with Portsmouth being followed by Bournemouth (+6.9%), Leicester (+6.1%), Swansea (+5.7%), Edinburgh (+3.7%), Glasgow (+3.2%), Bristol (+3.1%), Aberdeen (+2.7%), Cardiff (+1.7%), Newcastle (+0.9%), and Plymouth (+0.1%).
Meanwhile, the strongest annual demand increase has been recorded in Newport, Wales (+17%), followed by Aberdeen (+5.3%) and Manchester (+2.7%).
New-build stock keeps falling
As new-build demand struggles to maintain upward momentum, stock levels are also trending downwards, recording both quarterly and annual declines.
Across Britain, new-build stock fell by -0.2% in Q3 2024 which means new-builds currently account for 6.3% of all residential listings, compared to 6.5% in Q2.
This national picture of new-build stock decline is accentuated by the city-level analysis. Just nine of the 20 cities studied have seen a quarterly increase in stock, and after Aberdeen’s promising rise of +2.8%, no others have managed growth of much more than half a percent.
Stock in Manchester is up +0.6%, and the same is true for Swansea (+0.6%), Glasgow (+0.6%), and Cardiff (0.6%). In Bristol, Newport, Birmingham, and Edinburgh demand is up +0.1%.
Meanwhile, nowhere has seen stock dwindle more than Plymouth where it’s down -0.5% on the quarter, followed by Leicester (-0.4%), Sheffield (-0.4%), and Bournemouth (-0.4%).
Jason Ferrando, CEO of easyMoney says: “While it’s certainly disappointing to see new-build demand take a dip in Q3 after recording an increase in Q2, we can attribute this decline to the fact that interest rates remain stubbornly high which is deterring would-be buyers from taking the plunge into the market. This is especially true for the first-time buyer demographic which is particularly active within new-build sector.
"However, interest rates are now starting to ease and when they start to do so more substantially, we’ve no doubt that many buyer interest for new-build homes will climb once again.
"As for further declines in new-build stock, we know with real certainty that this will be addressed and corrected sooner rather than later as the new Labour government has named housebuilding as a priority for these early years of their term. As soon as Sir Keir and his team can get the ball rolling, we’re going to see new-build delivery increase, perhaps at a rate we haven’t seen for an awfully long time.”
