The number of new homes being built continues to fall, but there are tentative signs this could be reversing, with the number of new build registrations rising month on month in the first quarter of this year.
Figures from the National House Building Council (NHBC) show that political promises to build more homes are a long way from being delivered, with the number of new home registration down 20% in Q1 2024, when compared to the same period the year before. The number of new home completions down 13% over the same period.
In total NHBC — the UK’s largest provider of new home warranties and insurance — said 21,967 new homes were registered to be built in Q1 2024, and 26,240 new homes were completed in the same period.
It said this fall reflect the continued economic challenges of higher interest rates, skills shortages and the eighth wettest winter on record.
But despite these gloomy headline figures, NHBC pointed to more encouraging data, with new home registrations increasing monthly from January to March. A total of 8,320 new homes were registered to be built in March compared to 7,090 in February and 6,557 in January. It added that Q1 2024 registrations were also higher than both Q3 and Q4 2023.
Across the UK, nine out of 12 regions saw a fall in registrations compared to Q1 2023, with the biggest drops in East Midlands (-43%), Wales (-43%) and North West and Merseyside (-41%).
Registrations though were up in London (+2%), Scotland (+4%) and Northern Ireland and the Isle of Man(+23%).
The NHBC figures show there were 13,633 private sector registrations in Q1 2024, down 21% on Q1 2023 (17,339).
Although there was some refocusing of major house builders’ output to help address the demand for affordable homes, the rental and affordable sector also saw a decline, with 8,334 registrations in Q1 2024, down 19% on Q1 2023 (10,280).
In terms of house types, there were declines of 43% in bungalows, 26% in terraced properties and 24% in detached homes. Apartment registrations saw the lowest fall (-12%) due to the relative strength of the rental and affordable sector.
NHBC CEO Steve Wood says: “Our Q1 2024 figures reflect prevailing market conditions. Rises in the Bank of England’s base rate have driven mortgage rates higher, leading to a drop in new home purchases and a slowdown in house price growth.
“Prolonged wet weather has also hampered house building output in Q1, with the south of England experiencing its wettest February since 1836, according to the Met Office, and many parts of southern England recording well over twice the average rainfall.
“House builders are cautiously optimistic and it is encouraging to see signs of growth, with a month-on-month increase in registrations since January. This is despite a cumbersome planning system that continues to impede output and a national skills gap that means almost 225,000 extra workers will be required to meet expected UK construction demand by 2027.”
