The decline in new home completions in the first quarter was less steep, down just 7% on 2022, as builders focus on finishing projects already in the pipeline.
The fall in new home registrations across the UK was most acute in the private sector, where it was down 49% on 2022. The rental and affordable sector dropped 11%. There is evidence that some developments that were initially earmarked for private sale have been block sold to housing associations and other providers, said the NHBC, indicating a shift towards affordability.
Wales saw a 58% fall in new home registrations in the first quarter and Scotland a 42% fall; London and the southeast were down by 50% and 55% respectively, compared to the same period in 2022.
While the first quarter statistics look gloomy for the house-building industry, two numbers present a more positive outlook. New home registrations over the last 12 months were up 7% on the previous 12 months to reach the highest annual volume since 2008; and new home registrations in March were 54% higher than in February – there were 11,928 new home registrations in March compared to 8,005 in January and 7,740 in February.
NHBC chief executive Steve Wood said: “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.
“While output may have slowed, building at a more controlled rate helps drive quality, which ultimately leads to better outcomes for the consumer.
“Buying a home is the biggest financial commitment many of us will ever make, so it is no surprise that prospective buyers are waiting to see if interest rates will fall in the coming months before making purchase decisions.”
The data also reveals that the number of detached houses being built in Q1 2023 was half that in Q1 2022 (8,041 in Q1 2023 vs 16,089 in Q1 2022), with terraced homes and apartments representing a larger part of the market than the same period last year.
Mr Wood said that this suggests that some builders are focusing on the affordable end of the market. He added: “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.”
He concluded: “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.”
The figures relate to new homes registered with NHBC for its 10-year warranty, which represents approximately 75% of all new homes built in the UK,
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