Off-Plan Buyers Drop

Higher interest rates have caused off-plan home sales to tumble in the UK, prompting the nation’s housebuilders to scale back development.

Some 32% of new homes were sold before they were built in England and Wales last year, down from 39% in 2022 and the lowest level in ten years, according to Hamptons International. That’s bad news for developers, which have been slowing build rates to preserve capital and ensure they’re not left with large numbers of unsold homes, the broker said.

With more homes only sold after they’re finished, it means developers are borrowing money for longer and at higher interest rates,” said David Fell, lead analyst at Hamptons. “This means the government is unlikely to get close to hitting its housebuilding targets until interest rates drop back considerably.”

Source: Bloomberg May 27, 2024

https://www.bloomberg.com/news…

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