New home registrations have declined by 42% in Q2 2023 compared to the same period last year, according to the National House Building Council (NHBC)
38,044 new homes were registered in the UK in April, May, and June. In comparison, there were 65,645 new home registrations in Q2 2022.
The fall in new home registrations has largely been attributed to changes in building regulations related to energy conservation. The rate of new home completions also fell in Q4 due to lower demand related to mortgage rate increases.
“It is hardly surprising that consumer demand for new homes began easing in the second quarter. With mortgage rates at a 15-year high, volumes of homes built for private sales have weakened, although this is partly offset by bulk sales into affordable housing markets,” said Steve Wood, CEO of NHBC.
New home registrations are lowest in Northern and Eastern regions
Private sector registrations reached 24,783 (-51% compared to Q2 2022), while rental sector registrations ceased at 13,261 (-14% compared to Q2 2022). London saw a 9% increase, Wales 1%, but the North West, North East, and Eastern regions experienced significant declines of -67%, -60%, and -56%, respectively.
The rise in London registrations arguably reflects a focus on alternative residential markets like build-to-rent.
The completion of new homes saw a lower overall decline. This fell by 11% from Q2 2022 to Q2 2023. New home completions in the private sector also fell by 18%. However, completion in the rental sector rose 8% compared to Q2 2022.
Changes are coming to the housing sector
These figures reflect difficulties in the housing sector amid drastic government reforms in the housing and construction sector. The government recently announced its intention to ease planning rules as part of its commitment to construct one million homes from 2019 to 2024.
However, a recent report from the Department for Levelling Up, Housing and Communities Committee has argued that the government will not achieve its goal of delivering 300,000 net new homes annually by the mid-2020s.
“While new home registrations are down in Q2 2023, activity on site continues at a steady pace with builders focused on completing homes already in the pipeline,” commented Wood.
“The increase in completions in the rental sector may signal a renewed focus on affordable housing, helping to address some of the underlying demand for new homes among those impacted by higher mortgage rates,” he concluded.
