Around 26,240 new homes were completed in Q1 2024, 13% down on Q1 2023
Figures from the National House Building Council (NHBC) show 21,967 new homes were registered to be built in Q1 2024, down 20% on Q1 2023.
Around 26,240 new homes were completed in the same period, 13% down on Q1 2023.
Despite the drop – attributed to continued economic challenges, skills shortages and the eighth wettest winter on record – there are tentative signs of growth, with new home registrations rising month-on-month in Q1. Around 8,320 new homes were registered to be built in March compared to 6,557 in January and 7,090 in February. Q1 2024 registrations were also higher than Q3 and Q4 2023.
Steve Wood, Chief Executive Officer at NHBC says: Our Q1 2024 figures reflect prevailing market conditions. Rises in the BoE’s base rate have driven mortgage rates up, leading to a decline in new home purchases and a slowdown in house price growth.
Prolonged wet weather has also hampered house building output in the first quarter, with the south of England experiencing its wettest February since 1836, as per the Met Office, and many parts of southern England recording well over twice the average rainfall, he said.
House builders are cautiously optimistic and it is encouraging to see signs of growth, with a MoM rise 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, he added.
Across the UK, nine of 12 regions saw a decline in registrations compared to Q1 2023, with the largest declines in East Midlands (-43%), Wales (-43%) and North West and Merseyside (-41%). Registrations were up in London (+2%), Scotland (+4%) and NI and IOM (+23%).
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 drop, 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 drop (-12%) due to the relative strength of the rental and affordable sector.
Wood says: Build volumes are expected to increase in H2 2024 as economic conditions begin to improve and consumer confidence starts to recover. Any new home-buyer incentives ahead of the general election would also have a positive impact on house-building activity.