New home registrations in the first quarter of 2024 were higher than in the previous two quarters and have increased month-on-month this year.
However, first quarter registrations remain 20% down on a year ago – and completions are still outstripping starts.
The National House Building Council (NHBC) is the largest provider of new home warranties and thus its registrations is a leading activity of housing starts.
It reports that 21,967 new homes were registered to be built in Q1 2024, down 20% on Q1 2023 (27,619).
The first quarter of 2024 saw 26,240 new homes completed, 13% down on Q1 2023 (30,071).
Despite this year-on-year decline – attributed to economic headwinds and wet weather – there are signs of growth, with new home registrations increasing month-on-month in the first quarter. There were 6,557 new homes registered to be built in January, 7,090 in February and 8,320 in March.
Across the UK, nine of the 12 regions saw a fall in registrations compared to Q1 2023, with the biggest drops in East Midlands (-43%), Wales (-43%) and Northwest and Merseyside (-41%). Registrations were up in London (+2%), Scotland (+4%) and Northern Ireland (+23%).
There were 13,633 private sector registrations in Q1 2024, down 21% on Q1 2023 (17,339). Although there was some refocusing of major house-builders’ output to help address the demand for affordable homes, the rental and affordable sector also saw a decline, with 8,334 registrations in Q1 2024, down 19% on Q1 2023 (10,280).
NHBC chief executive Steve Wood said: “Our Q1 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 Q1, with the south of England experiencing its wettest February since 1836, according to the Met Office, and many parts of southern England recording well over twice the average rainfall.
“House-builders are cautiously optimistic and it is encouraging to see signs of growth, with a month-on-month increase in registrations since January. This is despite a cumbersome planning system that continues to impede output and a national skills gap that means almost 225,000 extra workers will be required to meet expected UK construction demand by 2027.”
He 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. Any new home-buyer incentives ahead of the general election would also have a positive impact on house-building activity.
“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.”
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