"Despite high interest rates and expensive mortgages, homebuyers are still actively looking to make a new-build investment"
- Jason Ferrando - easyMoney
New market analysis by easyMoney has found that homebuyer appetite for new-build properties is on the rise with demand climbing by 0.8% in the past quarter as the new-build sector proves it can hold its own in the face of higher than usual interest rates.
easyMoney’s New-build Sector Review is a quarterly review of supply and demand within the sector, looking 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 enjoys a quarterly boost
The latest figures for Q2 2024 show that one in five new-build homes listed for sale across Britain’s major cities had already found a buyer having been listed as sold subject to contract (SSTC).
While this marks a slight annual decline of -0.1%, it also points to a quarterly boost of 0.8%.
Britain’s strongest new-build demand hotspot is Southampton where 44% of all listings have already been sold. This is followed by Bournemouth (36.2%), Newport (32.7%), Sheffield (28.6%), and Plymouth (25.9%).
However, the place in which demand has seen the strongest quarterly increase is Newport, Wales where Q2 2024 saw an increase of 11.1%. Newport has also seen the nation’s largest annual demand increase of 28.7%.
Positive quarterly growth has also been recorded in Manchester (5.3%), Nottingham (4.6%), Swansea (4.2%), Aberdeen (2.6%), Plymouth (2.1%), Sheffield (1.2%), London (0.8%), Leicester (0.5%), and Leeds (0.1%).
New-build stock is dwindling
While new-build demand is showing signs of positive growth, the nation’s new-build supply levels are looking less promising.
Across Britain, new-build stock fell by 0.5% in Q2 2024 which means new-builds currently account for 6.5% of all residential listings.
While this isn’t too large of a decrease, the city-level data shows a more concerning picture. Only four of the 20 cities analysed have actually managed to record quarterly increases in stock, led by Plymouth where stock has increased by 0.8%.
The remaining 16 cities have seen numbers dwindle, nowhere more so than Manchester where the quarterly stock decline hits -7.2%, followed by Liverpool (-1.9%), and Aberdeen (-1.6%).
Jason Ferrando, CEO of easyMoney says: “It’s encouraging to see new-build demand climbing on the quarter, and not for the first time this year.
"Despite high interest rates and expensive mortgages, homebuyers are still actively looking to make a new-build investment. Much of the sector’s continued success will be due to new developments being well-positioned in areas where people want to live and have the money to buy, not least in urban areas and their respective commuter belts.
"Whatsmore, with the supply of new-build homes struggling to keep pace with demand, we can fully expect demand to increase even more in Q3 and beyond, not least in the likes of Manchester where quarterly demand is up 5.3% while stock is down by more than -7%.”
