Latest news with #newbuildhomes
Yahoo
12-07-2025
- Business
- Yahoo
London new-build home sales suffer ‘catastrophic' plunge
Sales of new-build homes in London have slumped to their lowest level since the global financial crisis. Just 3,946 new private and build-to-rent properties were sold in the capital between January and June this year – a fall of nearly 30pc compared to the same period last year, according to research from Molior. The slump has been more pronounced over the past three months, with only 1,691 homes sold in April, May and June. That is the lowest level since the global financial crisis, when 1,549 new build properties changed hands in the third quarter of 2009. Just over 3,300 were sold in the first half of that year. The decline has been blamed on the insufficient financial incentives for property developers to build new homes and for buyers to purchase them, leading to fewer developments and sales. Tim Craine, founder at Molior, said the fall was 'catastrophic' and blamed London's City Hall for deterring more new homes from being built. 'The market is now as bad as it was in early 2009, perhaps the early 1990s. But at least back then, the market was allowed to function,' he said. Crucially, Mr Craine said the Greater London Authority, the body that governs London, was negotiating 'too hard' in demanding higher taxes from housing developers to fund affordable housing – putting developers off building more homes. He said that 'if developers can't sell homes, they won't build them'. He added: 'Remember, the Soviets used to set the price of bread. Guess what? No one made any bread. This is the same kind of thing.' The plunge in sales has major implications for the Mayor of London's target of building 88,000 homes per year – with the latest total representing only 9pc of 44,000 homes at the half-year mark, Mr Craine said. Efforts made by the Government to resolve supply-side delays through reforms to the planning system and at the Building Safety Regulator will still leave 'a significant demand-side problem', he said. Charlie Hart, from property consultancy Knight Frank, warned that over-regulation was 'stifling delivery' from property developers. He said: 'Without urgent address by both central Government and London City Hall, the capital's development, construction and other associated sectors – a cornerstone of its economy – are at high risk of failure. 'Immediate action is needed to relieve the pressure, and both buy-side and supply-side reform will help unlock delivery as well as demand.' Mr Craine added that the situation was made worse by a lack of discounts to incentivise domestic buyers who purchase off-plan, several of whom have already been 'pushed out' of the market by the Chancellor's stamp duty increases, and persistently high building costs. He said an increase in sales, driven by more demand-side initiatives, will give developers 'the confidence to start building again at pace'. The news comes after house prices across the UK stalled in June, according to Halifax, amid a slowdown in the jobs market and concerns about the economy. In 2009, the UK's property market was hit by a global slump in house prices, triggered by the US subprime mortgage crisis. Britain also endured a housing crash in the early 1990s, driven by rising unemployment and high interest rates. The Mayor of London's office was contacted for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Daily Mail
02-07-2025
- Business
- Daily Mail
Housing market hits milestone not seen since 2009
The housing market has reached a milestone it has not seen for 15 years, and it could be good news for buyers. The number of newly built homes on the market is at the highest level it has been since 2009. Home builders are struggling to find buyers in the frozen housing market, as elevated interest rates disincentive existing owners moving, and keep mortgages out of reach for many first time buyers. Coupled with house prices remaining at their most unaffordable level in recent history, the result is an unusually high inventory of new-build homes available. Home builders are offering discounts and perks as they try to offload them, according to Marketwatch. The typical home buyer cannot afford to pay current prices and current interest rates on a mortgage. 'The big story in the housing sector remains the inventory situation,' Stephen Stanley, chief economist at Santander U.S wrote in a note to investors. Stanley says the inventory is now 'bloated' and has been since last spring when the market tends to pick up pace. Despite builders efforts to entice buyers, success has been limited, according to Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. 'Mortgage rates remain too high for sales to climb significantly higher, while the softening labor market likely will limit the flow of potential home buyers,' Allen wrote in a note. 'With housing payments at an all-time high, many buyers are feeling priced out,' Redfin chief economist Daryl Fairweather (pictured) told earlier this year. 'But sellers still need to move, which means they're increasingly offering concessions to get deals done — especially on condos and townhomes.' Major builder Lennar have said they will look to lower prices in order to move its existing inventory. And Lennar is not alone. Around 30 percent of builders cut home prices in January, the National Association of Home Builders (NAHB) reported — by an average of 5 percent. 61 percent of builders also offered sales incentives in January, the NAHB survey revealed. Incentives include mortgage-rate buydowns and smaller floor plans. Sales of newly built homes did grow in 2024 compared to 2023, according to federal government data, but inventory remains elevated. By contrast, 2024 was the worst year for sales in 30 years for the resale home market. Inventory in the resale home category is also rising, up 16.2 percent from a year ago, which gives buyers more options too. The South and West of the country are the most attractive regions for prospective new construction buyers, a new report from revealed. The regions have larger shares of new build homes available on the market, lower new construction premiums, and more opportunities for mortgage rate buydowns, the report found.
