New home registrations stabilise following Brexit vote

November 3, 2016 / Isla MacFarlane
New home registrations stabilise following Brexit vote

Almost 36,000 new homes were registered in the UK by NHBC in the third quarter of 2016, virtually identical to the same period last year when 35,954 new homes were registered in the UK.

Registrations in August and September were at their highest since 2007, however July bore the brunt of the referendum shock.

“Our latest statistics show that the industry continues to consolidate on the strong growth in registrations seen in recent years,” said NHBC Chief Executive Mike Quinton. “Following a quiet July, registrations bounced back in August and September as the industry shrugged off early nervousness following the vote to leave the EU.”

London, however, continues to drag down the numbers, with a 45% plunge in the number of new homes registered. According to the NHBC, housebuilders in London have moved out of zones 1-2 and are now concentrating on more affordable properties in zones 3-5.

“The pipeline has slowed down,” said Neil Jefferson, Business Development Director at the NHBC. “Housebuilders are investing in a lower price point.”

The affordable sector was up 18% with 9,191 new homes registered compared to 7,764 in Q3 2015, while 26,762 new homes were registered in the private sector, a 5% decrease on the 28,190 a year ago.

According to Kate Davies, Chief Executive, Notting Hill Housing, the fear of Brexit has cast a cloud over the capital. “The private sector is worried about Brexit,” she said. “There is a fear that it will change London’s status in the world. The land market [in London] has definitely loosened. The competition for land has weakened.”

The falling pound has also sparked fears that skilled workers from the EU, who remit wages back to their home countries, are packing up and leaving already. “Their salary is now worth 20% less,” said Davies. “700,000 skilled workers are retiring in the next five years, and there are only 2,500 apprentices coming on board a year.”

Elsewhere in the UK, half of the 12 regions showed an increase in registrations during Q3, including the South East (+56%), North West (+48%) and Yorkshire & Humberside (+42%). The remaining six reported a dip in numbers, with new registrations in Scotland falling 38%.

The number of new home completions also stabilised in Q3, increasing 5% from the same period 12 months ago.

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