New data from the National House Building Council (NHBC) has revealed 27,673 new homes were registered to be built in Q1 2023, a 40% decrease from last year
The biggest decline in house building has been in the private sector, with a 49% decline in new home registration in Q1 2023 compared to Q1 2022. The rental and affordable sector performed better, with an 11% drop over the same period.
The stats suggest that some developments designed for private sale have been block sold to Housing Associations and other providers, indicating improvements in affordability. There has also been a decline in new home competition of 7%. This is due to builders focusing on other unfinished projects.
New home registration is on the up
Over the past year, new home registrations have increased by 7%. The construction industry experienced a significant increase in new home registrations in 2022, resulting in a total of 191,801 new homes registered. This is the highest number of new home registrations since 2007 when there were 198,467 registered.
There is some indication of a return to confidence in house building in Q1, with 11,928 new home registrations in March, compared to 8,005 in January and 7,740 in February.
“Despite a slow start to the year, the new homes market is holding up well, with a 7% rise in new home registrations over the last 12 months. Emerging from the economic shocks of 2022 and getting to grips with a demanding regulatory environment, the data indicates house builders are taking stock, planning their output carefully and matching it to expected demand,” said NHBC CEO, Steve Wood.
The focus is now on affordable house building
According to the data, the number of detached houses being built was down by 50% in Q1 2023 compared to Q1 2022 (8,041 in Q1 2023 vs 16,089 in Q1 2022). Terraced homes and apartments represented a larger part of the market than in the same period last year.
“Emerging from the pandemic, we saw record numbers of registrations for detached homes, but now with pressures on family finances, it is no surprise that the present focus has shifted towards affordable homes in both the private and rental sectors,” commented Mr Wood.
During Q1, the devolved nations, along with the South East and London, experienced substantial drops in the number of registrations. Wales had a 58% decrease, Scotland had a 42% decrease, and London and the South East experienced a 50% and 55% decrease in volumes, respectively, compared to the same period in 2022.
“Despite very real supply side pressures and some stalling of consumer demand, the fundamental health of the market remains. There is a growing sense of confidence that more normal conditions are starting to return as the year develops,” concluded Mr Wood.
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