INDUSTRY NEWS 5
New home registrations up, but slowdown ahead
Industry gives mixed response to Chancellor’s Autumn Statement
The housebuilding sector gave a mixed response to Chancellor eremy Hunt’s fi rst Autumn Statement, in which he outlined a series of measures designed to protect the UK against global economic forces, but also provided relief to businesses expecting tougher tax burdens. Hunt promised a £14bn “tax cut” in business rates, particularly targeted at helping smaller fi rms. To assist with in ationary pressures, interest rate rises and the downturn in house prices, Hunt gave homebuyers a stay of execution on the stamp duty cut, until March 2025. He also announced that that tax perks would be restricted to clamp down on “R&D fraud” in SME businesses.
While praising his efforts to stabilise the mortgage market, Stuart Law, CEO of property lender Assetz Group said that housebuilders “will have their heads in their hands as Jeremy Hunt failed to afford any time to planning reform, while the retention of the stamp duty cut will protect demand over coming years at a time when a huge imbalance in market forces sits at the heart of our national housing crisis.”
He added: “Until we stop kicking the can down the road, we will never build enough homes, or take steps to make housing more accessible and affordable for more people.”
Law said that housebuilders and developers would also be “deeply concerned that the imperative for government departments to fi nd effi ciency savings will mean less public sector investment in the housing sector, as well as planning delays at already under-funded local authorities.” aul oodward, fi nance director for Dorset-based affordable housing specialist AJC Group, said that while
it was “encouraging to hear Jeremy Hunt start his speech with a promise to prioritise stability, growth, and public service, the fact that stamp duty would return for fi rst-time buyers in was “disappointing.”
He said that “with the Energy Price Guarantee rising to £3,000 for the average household from April, there should be a huge focus on delivering highly energy effi cient new homes and retrofi tting existing housing stock. However, the UK’s broken planning system – and the prolonged debacle to determine phosphates, nitrates and nutrient neutrality – means a green light for new development is few and far between.” “For developers such as us who do have live sites, the cost of delivering much- needed EPC-A and B rated homes has sky- rocketed. We are currently delivering 230 affordable, open market, and build-to-rent homes at seven sites across the Wessex region. The cost of labour, materials, plant, and machinery is incomparable to the original budget forecasts.” Hunt also announced that social rent would be capped in 2023, recommitted to the UK’s COP26 climate goals, and announced a further £6bn would be spent on achieving the targets in 2025. He also announced a target of a 15% “reduction in energy consumption by businesses and industry” by 2030, but was unclear how this related to previously announced goals.
Against the backdrop of the Autumn Statement, property giant JLL was forecasting that UK house prices will fall in value in 2023 by 6% which equates to an average discount of £17,500 on the average current UK house price of circa £290,000.
New home registrations increased by 33% in the third quarter of 2022 compared to the same period last year, according to research by the NHBC.
A total of 44,729 new homes were reg- istered to be built in Q3 2022 compared to 33,603 in Q3 2021. This is reportedly the highest fi gure since , despite ex- pectations that property sales will slow in the coming period due to higher mortgage rates and faltering consumer confi dence. Private-for-sale registrations were up by 26% to 32,702 (Q3 2021 25,862), while the affordable and build to rent sector grew by 55% overall, up from 7,741 in Q3 2021 to 12,027 in Q3 2022.
New home registrations rose for every house-type in Q3 2022 with a shift in mix back towards apartments with 9,006 reg- istered in Q3 2022, up 114% on Q3 2021. 45% of all new apartments registered in Q3 2022 were in London.
10 out of 12 regions experienced growth in registrations in Q3 2022 vs Q3 2021 with London, Scotland, Wales and West idlands experiencing signifi cant rises, due to lower levels in the previous year and the timing impact of some large site registrations. There were small dips in the South West and Northern Ireland with developers in these areas reporting a slight cooling of the market.
New home completions also increased from 32,100 in Q3 2021 to 34,977 in Q3 2022, despite some ongoing disruption in the supply chain.
Commenting on the latest data, NHBC Chief Executive Steve Wood said: “Despite prevailing conditions, the third quarter was a strong one for new home regis- trations. In part this is the ‘bounce-back’ post the pandemic, but it also re ects a confi dence that the underlying demand for new homes is holding across a range of tenures.
“That said, housebuilders and new home buyers are becoming more cautious, espe- cially in the face of higher costs of living and open questions about the nature and length of any recession in the UK. It seems likely that a slowdown is coming which will at least help ensure that homes con- tinue to be built to the quality required.”
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