There’s been another fall in the proportion of new-builds sold off-plan.
Data from Hamptons says 33 per cent of new home completions last year were sold off-plan, down from 35 per cent in 2019 and a peak of 39 per cent in 2016.
Perhaps surprisingly a record proportion of houses were sold off-plan in 2020 - 30 per cent - but most off plan deals remain in the flatted sector, where 50 per cent of new-build units are sold this way.
Over 52 per cent of all new homes completed in London last year had been sold off-plan, more than in any other region.
David Fell, senior analyst at Hamptons, says: “The introduction of the three per cent stamp duty surcharge in 2016 proved a tipping point. Since then, fewer homes have been sold off-plan.
“Typically investors are more likely to commit to buying a home during or pre-construction than any other buyer type but with fewer investors in the market, it has become harder to sell homes off-plan. However Help to Buy has softened this blow, with around four in 10 new homes sold using the scheme.”
He continues: “Securing off-plan sales is fundamental to the health and profitability of most new developments. By selling some homes before they are built, developers can reduce the sales period and generate an income before the scheme is complete, often using the money to fund ongoing works and repay loans.”