New-build market bouncing back quicker than second-hand market
Buyer demand for new-build property has bounced back 66 per cent in the six weeks since the resumption of the housing market according to research from Zoopla.
The portal says this recovery is a continuation of the upsurge in demand recorded at the start of 2020 – following the December General Election – when the property market recorded its strongest start to a new year since 2016.
While resale properties have also registered a significant recovery in demand, the rebound is currently tracking at 46 per cent in the week to June 21.
The recovery in demand for new homes follows a less significant fall in demand, compared to resale properties, in the immediate aftermath of the COVID lockdown and subsequent market suspension.
In the week to April 5, demand for new homes had fallen by 53 per cent compared to a 71 per cent drop in demand for resale properties.
Perhaps unsurprisingly, first time buyers – often regarded as the engine of the sales market, thanks to Help To Buy and other incentives – are driving forward a significant proportion of demand for new homes.
While first time buyer demand for new homes fell 68 per cent between March 8 and April 5, it has since recovered 87 per cent in the period to June 21.
Zoopla cautions that as some lenders withdraw higher loan-to-value mortgage products, it’s likely that more first time buyers will look to the support schemes exclusive to the new build sector to help bridge the deposit gap and take their first step onto the property ladder.
“Despite the pressures exerted by lockdown and social distancing, many new homes developers are accustomed to using technology in their day to day operation, harnessing CGIs and virtual viewings to immerse their home buyers into their product. This enabled many to continue selling – albeit, remotely” explains Alex Rose, director of New Homes.
And he adds: “We expect this initial spike in demand to settle as the summer progresses, but also for that demand to convert into sales agreed. First time buyers will no doubt uphold a level of demand, with many keen to make the most of Help to Buy, following the withdrawal of many 90 per cent loan-to-value mortgage products.”