The fall in the number of properties for sale across the country fuelled the first rise in new homes sold off-plan since 2016, report researchers at estate agent Hamptons. In 2021, 37 per cent of new homes that were sold in England and Wales found a buyer before completion, up from 35 per cent in 2020. While this figure is still below the 47 per cent peak recorded in 2017, it reversed the subsequent downward trend and meant more new homes were sold off-plan in 2021 than in 2007 when Hamptons records began.
The rise in off-plan sales has been driven by more houses (rather than flats) being sold before completion — 24 per cent of new detached home completions in 2021 were sold off-plan, compared to 21 per cent in 2020. This figure rose from 31 per cent to 33 per cent for semi-detached properties and from 41 per cent to 45 per cent for terraced homes. However, the proportion of flats sold off-plan fell, from 50 per cent to 44 per cent, meaning for the first time since 2007, a terraced house was more likely to be sold off-plan than an apartment.
This shift meant flats comprised just 37 per cent of all homes sold off-plan in 2021, down from a recent peak of 53 per cent in 2016 and a larger peak of 69 per cent in 2008.
Today, off-plan purchasers are increasingly likely to be owner-occupiers seeking houses rather than flats. This stands in contrast to pre-2016 times and before the three per cent stamp duty surcharge on second homes was introduced, where off-plan sales were firmly driven by flats sold to investors.
The largest developments continued to see a higher share of homes sold off-plan, as these schemes tend to be best set up to agree forward sales. Last year 70 per cent of properties at developments with more than 50 homes were sold off-plan, compared to 25 per cent at developments with fewer than ten. But these figures mask a shift which saw an increase in the share of homes sold off-plan at smaller schemes (up from 19 per cent in 2020) as buyers sought out individuality, while off-plan sales rates in larger developments remained unchanged.
Open-plan living in Bessborough apartments, Harrow, from £555,000
Most new-build buyers hand over a standard ten per cent deposit on exchange of contracts with the balance payable on completion. And this means that last year buyers paid a record £1.1 billion in deposits to developers for homes that had yet to be built. This is three times the amount handed over in 2007 (£348 million) and marks the first time this figure has exceeded £1 billion. Hamptons notes that this value has been driven up by rising prices and the steady shift towards more houses and fewer flats being sold off-plan, which has pushed up the size of the average deposit.
With houses increasingly likely to be sold off-plan and stock levels the lowest in the country, the Cotswold district saw more new homes sold off-plan than anywhere else in England and Wales. Here, 86 per cent of new homes completed last year had been sold before they were built. Just two of the ten local authorities which saw the highest proportion of homes sold off-plan across England and Wales last year were in London, down from six five years ago.
David Fell, senior analyst at Hamptons, says: “The lack of second-hand homes available to buy has meant that owner-occupiers are increasingly turning to new-builds, with more willing to buy off-plan in the face of limited options on the market. Typically, these are chain-free homeowners who have more flexibility on moving dates. Despite this, owner-occupiers don’t buy as far in advance as investors, who are often happy to wait a year or two, particularly when prices are rising. They’re also more likely to seek out bespoke, individually designed houses in smaller schemes, rather than flats in big city centre blocks.
“After nearly four years of falls, the rise in off-plan sales will provide respite for developers looking to maintain sales rates as Help to Buy winds down. Whether this shorter-term shift has the potential to turn into a longer-term trend remains to be seen, but unlike the past, it’s owner-occupiers rather than investors who are likely to continue driving off-plan sales in 2022.”
Among developments currently being sold off-plan by Hamptons is Bessborough Apartments, Harrow, a gated development of nine contemporary two-bedroom, two-bathroom apartments with parking. They have impressive views of the Harrow-on-the-Hill skyline and are a short walk from Harrow-on-the-Hill town centre. Prices start at £555,000.
Verla, St Albans, from £358,000.
In St Albans (best place to live in the South East, according to the Sunday Times in 2020), Crest Nicholson is building Verla, one-, two- and three-bedroom apartments with open-plan kitchen, living and dining rooms and double bedrooms. Many of the larger properties have an en-suite shower room to the master bedroom in addition to a main bathroom. Fitted wardrobes and lots of built-in cupboard space are provided.
Many properties are dual-aspect and most have a terrace or balcony.
Verla is less than a mile from St Albans city centre and 100-acre Verulamium Park. The station is a ten-minute walk from Verla, allowing travellers to reach central London in half an hour (or, in the opposite direction, Luton Airport in eight minutes). The A414, A1M, M1 and M25 are within a ten-minute radius.
Prices start at £358,000 with Help to Buy available.
Nouveau, Stanmore, from £500,000
In Stanmore, Griggs Homes is building Nouveau, nine one- and two-bedroom apartments above the Mosaic Synagogue, in a gated setting with outside space and private parking.
The apartments will have soft-close designer kitchen furniture with integrated Siemens appliances and Italian quartz worktops; bedrooms will have fitted wardrobes and there will be fully tiled bathrooms and en-suites and underfloor heating throughout. Most will have balconies/terraces.
Nearby Stanmore Broadway has a wide range of amenities and Stanmore’s Jubilee Line station is a short walk from Nouveau. Prices start at £500,000 with Help to Buy available on selected plots
Hamptons is agent for all the properties mentioned above.
