The amount of new builds has dropped close to half of what was being built pre-Brexit.
It’s been obvious to see that the uncertainty surrounding Brexit has been holding back many private property developers from starting with their residential development plans and projects.
This has seen the amount of new London homes being built decrease by more than a fifth and will continue to do so within the first half of 2020.
Between January and September, construction commenced on over 13,000 flats and houses. However, during the same period, the year before this number was over 17,000.
But what does this mean?
Sure enough, this sounds pretty negative for the housing market.
According to the latest figures from analysts Molior London, there are 21 per cent fewer flats and houses being built than the previous year.
Back in 2015, before the EU referendum, construction had commenced on over 25,000 homes, almost double the current amount.
However, the good news from this is that new sales figures outline that buyers are about to make a return to the market, which will increase the demand in new build developments as we see more first-time buyers become homeowners.
During the third quarter of the year across London, houses sold privately by developers topped 5,000 since the first quarter in 2018.
Developer, Chelsea Waterfront has also reported a huge increase in sales activity that included 50 per cent of buyers being British citizens.
“Flats that are worth a total £250 million have been sold at the site, with almost four times as many deals struck since September as in the preceding nine months” – Robin Gevell, senior marketing manager at the Hutchison Property scheme
He continued to note that Brexit had caused a slow in the market, but over the last three months has suddenly seen a huge spike in house sales, especially in prime area locations like Chelsea in London.
“More interestingly still, this isn’t just overseas investors taking advantage of the weak pound, but a variety of British buyers looking for a unique property with a renowned postcode.”
Meaning that British people are taking advantage of Brexit uncertainty as investment from overseas cools off.
This could be due to the fact that over the next few years there will be a 15% increase to wages, providing better and easier opportunities to take the first step on the property ladder.
And this can only mean positive things for the property market and private developers alike.
However, due to skills shortages and demand increases the need for new builds and developments will also see a spike.
This will make land with planning permission very valuable as well as residential plots that will see a lot of flats being converted into homes.
First-time buyers expected to increase a surge in sales
Predictions have been made for next year’s housing market and first-time buyers are leading the charge.
Statistics show that house prices will rise at an expected 5% by 2025. Other expectations are:
- Wages to increase by 15 per cent
- Land with planning permission is set to become more valuable as even Governments look to acquire more
- House prices expected to increase by 25%
- Developers looking to create their own Help to Buy schemes
Despite the uncertainty surrounding Brexit and the pound, the housing market in 2020 looks prosperous as we expect to see a huge surge of first-time buyers emerge in line with income growth, and lucrative opportunities rise up for landowners and developers. This indicates that there is no better time to develop.
Hunter Finance can use their expertise in the property field, call on a number of resources and ensure you don’t waste time on lenders who are unlikely to back you. We may be able to offer you a good deal on your finance and there are no brokers fees as we lend our own money.