New-builds coming to housing market at near 10-year low – Rightmove

UK Housing Market Faces New-Build Shortfall as Developments Hit Decade Low

New builds coming to housing market - According to fresh analysis from property platform Rightmove, the volume of new-build housing developments entering the market has fallen to its lowest point in nearly ten years. This decline comes amid growing calls for decisive government intervention to address what experts describe as a persistent "long-term shortage" of affordable housing across the country.

The property website has been monitoring for-sale listings on its platform for over a decade, providing valuable historical context for current trends. Rather than focusing solely on individual homes or plots, Rightmove's methodology examines entire developments as they come onto the market, offering a more comprehensive picture of new-build activity.

Market Growth Masks Underlying Concerns

While new-build developments have slowed, the broader housing market tells a different story. Across the entire market, which encompasses both new and existing properties, the number of homes available for sale has risen by 85 percent compared to four years ago. This increase suggests that while new construction has decelerated, existing homeowners are more willing to list their properties.

Colleen Babcock, Rightmove's property expert, emphasized that despite the historically high number of available homes for sale, there is still a long-term shortage of affordable homes in the right place.

We need more homes to support people at every stage of the moving journey, from first-time buyers to downsizers.

Housebuilders are currently required to allocate a certain proportion of homes in new developments as affordable housing under government quotas. These requirements aim to ensure that new developments contribute meaningfully to addressing the affordability crisis facing many prospective homeowners.

Government Targets Under Pressure

The government has established an ambitious target of building 1.5 million homes over the course of this parliament. This goal is designed to create more affordable housing options and help first-time buyers navigate the increasingly challenging property market. However, Rightmove's data indicates that the country may not be on track to meet this objective.

This potential shortfall comes despite sweeping reforms to the planning system that were intended to cut red tape and accelerate development. The reforms were meant to streamline the approval process and remove bureaucratic obstacles that have historically slowed construction projects.

Construction Industry Faces Headwinds

Survey data has revealed a prolonged slump for the UK's construction industry, which has been experiencing decline for approximately a year and a half. The S&P Global UK construction PMI showed that activity dropped at the fastest rate in May since the height of the Covid-19 pandemic. Builders have cited several factors contributing to this downturn, including project delays, hesitancy to make significant investment decisions, and general cutbacks to customer budgets.

Barratt Redrow, the United Kingdom's largest housebuilder, has called for more targeted support to help first-time buyers get on the housing ladder. Sales and marketing director Steve Mariner noted that while the government has made good progress reforming the planning system, helping unlock more land for development, other challenges remain.

However, increasing regulatory costs are holding new homes back, while low customer confidence, higher borrowing costs and wider economic uncertainty are all making it harder for first-time buyers to get on to the housing ladder.

Policy Recommendations Emerge

In response to these challenges, Rightmove has put forward specific policy recommendations. The platform is calling for stamp duty to be scrapped for first-time buyers for both new-build and resale properties. This proposal comes after stamp duty relief on higher-priced homes was removed last year, meaning some homebuyers now have to pay more tax than in previous years.

The combination of reduced new-build activity, construction industry headwinds, and increased tax burdens on buyers suggests that multiple factors are converging to create pressure on the housing market. Industry stakeholders are urging coordinated action to address these interconnected challenges and ensure that housing remains accessible to those who need it most.