A total of 21,967 new homes were registered to be built in the first quarter of 2024, down by 20% compared with the first quarter of 2023, the National House Building Council
The construction sector has been hit by a perfect storm of wet weather and challenging economic conditions with the number of new homes being registered for construction taking a 20% decrease in early 2024 compared to last year.
The National House Building Council (NHBC) reported that 21,967 new homes were earmarked for building in the first quarter of this year, a stark contrast to the same period in 2023. There was a slight uptick from the end of 2023, when only 19,084 new home registrations were noted.
With a commanding share of between 70% and 80% of the UK’s warranty market, the NHBC’s data is a key barometer for upcoming housing stock, as properties are registered with them prior to construction. It said that 26,240 new homes were completed in the first quarter of 2024, marking a 13% fall compared with the first quarter of 2023.
The NHBC said that despite the fall in new homes being registered to be built, there were some tentative signs of growth. In March 8,320 new homes registered, an increase on the figures for January and February. NHBC’s chief, Steve Wood, said: “Our (quarter one) 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 (quarter one). House builders are cautiously optimistic and it is encouraging to see signs of growth, with a month-on-month increase in registrations since January.”
Mr Wood also highlighted a “skills gap”, with extra workers needed to meet construction demand. The NHBC said that registrations of apartments have held up relatively well compared with other property types, which it said is due to the relative strength of the rental and affordable sector.
Mr Wood added: “Build volumes are anticipated to rise in the second half of the year as economic conditions begin to improve and consumer confidence starts to recover.. We are seeing early signs of growth returning to the private sector, and affordable house building is holding up well, but skills and planning challenges must be addressed to truly accelerate market recovery.”
The Bank of England decided to keep the rate unchanged at 5.25% last week, although governor Andrew Bailey said he is “optimistic that things are moving in the right direction”. The number of mortgage approvals made to home buyers jumped in March to the highest level since September 2022, according to recent Bank of England figures.
But the Royal Institution of Chartered Surveyors (Rics) recently reported that new home buyer inquiries fell back in April following three months of increases in a row. Rics has reported mixed regional feedback on buyer demand, with a significant slowdown primarily observed in London and the southern regions of England.
Here are the figures for home registrations in the first quarter of 2024 and the annual change compared to the first quarter of 2023:
North East, 1,250, down by 19%.
Yorkshire and the Humber, 1,578, down by 18%.
East Midlands, 1,755, down by 43%.
Eastern England, 2,766, down by 29%.
London, 2,429, up by 2%.
South East, 3,455, down by 7%.
South West, 2,281, down by 21%.
West Midlands, 1,963, down by 21%.
Wales, 382, down by 43%.
Northern Ireland and Isle of Man, 629, up by 23%.
North West, 1,609, down by 41%.
Scotland, 1,870, up by 4%.
