There has been a significant fall in the number of sales agreed for new build homes, with figures dropping 21% to 26,724, compared to 33,666 in 2019.
Research carried out by TwentyCi found this was in direct contrast with the number of sales agreed among resale properties, which now stand at 842,371, 6% higher than five years ago in 2019.
Despite this, there is no relation between the lower number of new build agreed sales and supply levels because there has been a 65% increase in the volume of these instructions in the last year.
TwentyCi believe that the price premium of new builds is the real cause of the reduction in demand seen over the past few years.
Mark Goodrich, head of AVM and developer sales at TwentyCi, said: “Our data reveals a very contrasting market between the demand for new-build and resale properties. The sales agreed figure has risen for both since last year but the picture is very different compared to 2019 with demand now 21% lower for new builds but 6% higher for resale homes.
“Supply is not the issue so we conclude the new build price premium is the key driver. On average, homebuyers are expected to pay 17% more for new build properties which is quite a high premium. Over the last three months for example, the UK average asking price was £497,939 for a new build and £425,130 for an existing property. That’s a value of around £72,800 more for a brand new home, money which could instead help boost the value of a resale home with home improvements or renovations.
“Buyers’ affordability has been heavily impacted by interest rate rises and the removal of schemes such as Help to Buy in recent years. Both of these factors mean new builds will be assessed by buyers very differently now compared with 2019.
“From 1 April 2025, stamp duty will revert to the pre-September 2022 levels meaning that the 0% threshold is back to £300,000 for first-time buyers from its current threshold of £425,000. It will be interesting to see if developers choose to incentivise first-time buyers after this date.”
