New-build demand on the rise now the election is over - claim

Demand for new-build homes in London eased in the run up to and just after the General Election but more recent data points to momentum building, research suggests.

Analysis by Knight Frank reveals the total number of offers made on new-build homes in the capital fell around 50% in both June and July this year compared with a year earlier, while viewings eased by just over 10%.

Anna Ward, associate at Knight Frank Research, said: “The election also caused activity to drop off across the broader London housing market, with new offers falling to their lowest level in June and July combined since 2012.”

It comes after an improvement in Spring, when the total number of offers made on new homes in the capital rose 9% in April compared with a year earlier, while viewings were up 17%, Knight Frank data shows.

But last week, viewings started picking up again, climbing 11% in the seven days ended 5 August compared with a year earlier, while weekly offers made have now recovered back to 2023 levels.

Domestic demand for new homes picked up in the first half of 2024 and has been supported by an uptick in international buyers, Knight Frank said.

Currently, buyers are focused on well-located central schemes in London. Including One and 10 Park Drive in Canary Wharf which have just 56 one or two bed apartments remaining out of a combined 830 private units.

In the first half of 2024, off-plan sales accounted for a third of all new homes sold with Knight Frank in London, where at least one year has elapsed between the exchange and completion date. This is up from a quarter during the same period of 2023.

The concept of buying off-plan is, however, less familiar to most UK buyers, the analysis said, who typically prefer to view build complete product before making a decision, while uncertainty over mortgages has also led some to hold off buying until a later stage.

This, coupled with the fact developers have slowed down their build out rates as demand has reduced, means options for completed homes are more limited in some areas.

Outer London has seen a 50% fall from a peak of just over 2,100 unsold finished homes in Q4 2019 down to 1,030 in Q2 this year.