New homes delivery to plummet by a third despite high demand

There’s been a big rise in demand for new-builds since the lockdown according to figures from Knight Frank - but the delivery of completed units is set to tumble.

The number of new applicants registering their interest for new build homes in the first two weeks of June 2020 was four per cent higher than in June 2019 it says - although the agency gives no indication of the actual number that represents. 

But it claims viewing numbers have also picked-up noticeably over the last few weeks as sales and marketing suites reopened - Knight Frank says viewing levels are only some six per cent below the five-year weekly average

In London specifically, Knight Frank reports that schemes in East London offering Help to Buy have been performing well, as have completed schemes along the riverfront. 

But the agency admits that while demand is “high” supply has been effected by the widespread suspension of development in April, which has impacted housing delivery. 

Knight Frank is predicting that total new build housing delivery will fall by 35 per cent in 2020, compared with last year.

“Housebuilders will be keeping a close eye on the recovery of the housing market; once they start to see demand return, they will look to gradually increase output. The speed of this demand increase will also effect land-buying decisions. Deals are still taking place, but at a slower rate with delayed completions, Covid-19 clauses, and extensions to bid deadlines” according to James Mannix, head of residential development at the agency. 

Knight Frank’s outlook suggests supply is likely to remain constrained for the next 12 to 18 months.