Angela Rayner's housing blitz in doubt as new-build sales plunge
Angela Rayner's housebuilding revolution has been thrown into further doubt after the number of people buying off-plan properties slumped to its lowest level in more than a decade.
Research by estate agency Hamptons found that only 31pc of new homes sold in England and Wales were bought before completion last year, compared to 49pc in 2016, as buyers shunned new-builds in favour of existing properties.
Labour has pledged to build 1.5 million homes by 2029 in the hope of getting more people on to the housing ladder, but experts warned the reluctance to buy new-builds could impact developer output.
Purchasing off-plan typically involves buyers visiting a show home or sales suite and reserving a plot based on marketing materials and floor plans.
Rico Wojtulewicz, spokesman for trade body the National Federation of Housebuilders, said: 'Some projects need to be bought off-plan to be funded in their entirety, so a drop in demand has created issues. There is also a drop in sales generally, which isn't helping.'
Mr Wojtulewicz said lower off-plan sales will 'absolutely' hurt the viability of Labour's housebuilding pledge.
'It makes it more difficult to make a site viable and to deliver it quickly. When a developer goes to buy a new site in the future, they'll be a lot more cautious about the size of the site.
'They'll probably look to buy a smaller site to reduce the risk of slow sales.'
David Fell, of Hamptons, said off-plan sales were at their lowest since 2012.
He said: 'Nationally, fewer new homes finding a buyer before they're built has hit housebuilders hard. It is unlikely that the level of off-plan sales being agreed is sufficient for the Government to get close to its 300,000 homes a year target, given that housebuilders rely on this forward funding to progress on site.'
The findings come after a study by the Competition and Markets Authority (CMA) published last year found a rise in the number of homeowners reporting issues with new-builds.
It also said a 'substantial minority experienced particularly serious problems such as collapsing staircases and ceilings'.
Separate data from conveyancing solicitor, Bird and Co, found the number of new-builds sold as a percentage of UK home purchases has fallen for a third year running. In 2024, it stood at 10pc, down from 11pc the year before and over 14pc in 2021.
The reluctance to buy off-plan comes two years after the Government called time on its flagship Help To Buy scheme. Most regions have seen between 10pc and 20pc falls in the share of new houses and flats sold off-plan since 2016.
As well as a drop-off in demand from would-be homeowners, there has also been a decline in landlords eyeing up off-plan plots.
Hamptons said landlords have shied away from locking in purchases ahead of completion due to the expectation that prices may not be higher by the time they're complete.
The average UK house price has remained relatively steady in the past year, climbing just 1.6pc according to Zoopla's latest figures.
Matthew Pennycook, the housing minister, admitted last year that delivering the manifesto pledge of building 300,000 homes a year is 'more difficult than expected', but remained 'convinced' it is achievable.
Ms Rayner, the Housing Secretary, has overhauled the National Planning Policy Framework to increase local authority housing targets and build on the green belt.
But, as it stands, Labour is falling shy of its target, with the UK's construction output sliding for a fourth consecutive month in April, according to the S&P Global UK construction purchasing managers index (PMI).
Last year just 184,390 homes were completed, and construction began on only 132,460.
A Ministry of Housing, Communities and Local Government spokesman said:
'Despite inheriting the worst housing crisis in living memory, the Government is taking action to deliver 1.5 million homes through our plan for change.
'Our overhaul of the planning system, including the updated National Planning Policy Framework, will drive UK housebuilding to its highest level in over 40 years and grow the economy by £6.8bn.
'Alongside this our landmark pro-growth Planning and Infrastructure Bill could also boost the economy up to £7.5bn over the next decade so that we can get Britain building.'
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