Demand for new build homes has soared by 66% since the housing market reopened, surpassing levels seen before lockdown.
The upsurge is a continuation of the trend recorded at the start of 2020, when the new build market enjoyed its strongest start to a year since 2016.
Persimmon Homes, one of the UK’s largest homebuilders, has seen a massive 215% month-on-month jump in demand through Zoopla buyer leads during the past six weeks. Leads are generated by buyers requesting more information from homebuilders via property listings.
The recovery in the new build homes sector significantly outpaces the revival in the market for older properties, where demand is currently 46% higher than before lockdown.
The surge in demand for new build properties has been particularly strong among first-time buyers, growing by 87% compared with levels during lockdown.
Alex Rose, director of New Homes at Zoopla, said: “While the industry has undergone an unprecedented period, the new homes market has shown itself to be geared towards a rapid rebound.”
Why is this happening? The resilience of the new build market is likely to be down to two factors. On the one hand, developers are used to having to sell homes when physical viewings are not possible.
Mark Cook, group sales and marketing director at Persimmon Homes, said: “Our experience in offering virtual viewings, exceptional computer-generated imagery (CGI), and understanding what it takes to sell off-plan, enabled us to sustain demand, even when the market was suspended at the height of the lockdown.”
At the same time, demand is also likely to have been supported by the fact that the Help to Buy scheme can only be used to purchase a new build property.
With many lenders withdrawing their 90% and 95% loan-to-value (LTV) mortgages in the face of the pandemic, more first-time buyers in particular are likely to be turning to the scheme in a bid to get onto the property ladder. The Help to Buy initiative tops up a 5% deposit with a five-year interest-free loan worth 20% of the property’s value.
First-time buyers are often described as being the lifeblood of the housing market, so it's good news for the new build sector that demand is so strong among this group.
Going forward, Alex Rose expects the initial spike in demand for new properties seen since the housing market reopened to 'settle' as the summer progresses and sales are agreed. “First-time buyers will no doubt uphold a level of demand, with many keen to make the most of Help to Buy, following the withdrawal of many 90% LTV mortgage products,” he says.