Off-plan home sales fall amid pressure on investors – Index
One estate agent estimates that around a third (34%) of new homes across England and Wales were sold before construction last year.
That proportion is down from a peak of nearly half (46%) in 2016, Hamptons figures show.
The proportion of homes sold off-plan across England and Wales last year was the lowest the Hamptons had recorded since 2013.
An increasing proportion of off-plan buyers are owner-occupiers, Hamptons said.
It has been calculated that in 2022 about one-fifth (21%) of off-plan purchases would be made by investors, up from 70% in 2015.
As price growth has slowed, buyers are generally less willing to commit to a purchase years before completion
It is estimated that first-time buyers accounted for around two-thirds (67%) of off-plan purchases last year.
David Fell, senior analyst at Hamptons, said, “Demand for off-plan real estate has steadily shifted away from investors buying two or three years in advance to first-time buyers who typically want to move within six to 12 months.” However, the majority still want to wait for a finished product.
“The slower price increases have also reduced the incentive for some buyers to get in early.
“A decade ago, investors who bought well before completion often saw the value of their new home increase by 20% to 40% between exchange and completion.
“But as price growth has slowed, buyers are generally less willing to commit to a purchase years before completion.”
The Hamptons Off-Plan Index used new home sales data from about 550 real estate agency branches owned by its parent company, Connells Group.
Figures from the land register were also used to model the data.
https://www.standard.co.uk/business/money/offplan-property-sales-slide-amid-squeeze-on-investors-index-b1082664.html Off-plan home sales fall amid pressure on investors – Index
