Sales of new build property falls, but prices keep rising

Sales of new build property fell almost 10% last year, as Brexit shackled nervous buyers to the spot. However, prices have continued to inch upwards.

In the year to end December 2019 new build prices rose 2.03% per m², according to the LSL New Build Property Index. However, there was a 9.1% drop in the sale of new builds received by HM Land Registry for registration.

The Conservative party’s unprecedented landslide victory in December has stoked the wider property market, with steady price rises in January.

The latest figures from Nationwide show a modest pick-up in annual UK house price growth to 1.9% in January from 1.4% in December. This follows twelve 12 successive months in which annual price growth had been below 1%.

“Indicators of UK economic activity were fairly volatile for much of 2019, but the underlying pace of growth slowed through the year as a result of weaker global growth and an intensification of Brexit uncertainty,” said Robert Gardner, Nationwide’s Chief Economist.

The underlying pace of housing market activity has remained broadly stable, with the number of mortgages approved for house purchase continuing within the fairly narrow range prevailing over the past two years. Healthy labour market conditions and low borrowing costs appear to be offsetting the drag from the uncertain economic outlook.

Sam Mitchell, CEO at online estate agent Housesimple, said: “Looking at the road ahead, economic developments are likely to remain the main driver of positive housing market trends. As Brexit moves forward and Boris settles into his new home at Number 10, we would expect political certainty to also get back on the straight and narrow. Not only will this boost the confidence of buyers and sellers, but it will also help to reduce any risk of a housing market standstill.”

According Lucy Pendleton, founder director of independent estate agents James Pendleton, property purchasers at home and abroad are feeling reassured as Britain prepares to sever ties with the EU. “Boris’s emphatic election victory has retrieved the spanner from the works and the housing market is now positively humming,” she said. “This index lands two days after UK Finance also revealed that home buyer mortgages were up 24% annually in December so Britons really look to be on the move.

“January usually marks a return of listings and viewings after the Christmas break. On London’s doorsteps, this has been manifesting itself with increased interest from foreign buyers and investors and, more importantly, a return of enthusiasm to move among domestic consumers. More footfall, more listings, more viewings and more offers over asking price have all marked out this month as the strongest start to any year this century.”

However, while the rise in prices is a positive harbinger for the economy and property owners, any increase could be detrimental to First Time Buyers. Josef Wasinski, co-founder of Wayhome said: “Although this rise may be welcomed by those looking to sell their home, it does nothing to ease the frustrations of those reluctant renters hoping to buy their first home.

“For many, there is little choice but to remain part of ‘generation rent’ amid an increasing struggle to raise the typical standard 10 percent deposit in order to get on the ladder.

“The truth is that we need real innovation in the property market to level the playing field and help those hardworking, credit-worthy people who want to own their own home. The Government needs to remember its manifesto promises and provide support to those aiming to make the next step.”