New-build homebuyer demand creeps up in Q1

New-build demand creeps up in Q1 but remains of the pace year on year

The latest New-build Buyer Demand Index by Alliance Fund, the end to end real estate and sport investment fund, has found that homebuyer demand for new homes has crept up during the first three months of the year, increasing by 0.8% when compared to the final quarter of 2022.

The New-build Buyer Demand Index by Alliance Fund is a quarterly gauge of buyer appetite for new homes across the nation’s major cities, based on the percentage of new-build properties listed for sale that have already gone under offer or sold subject to contract.

The latest index for the first quarter of 2023 shows that across Britain, just shy of a fifth (19.2%) of all new homes listed have already been snapped up by eager homebuyers. This marks a marginal 0.8% increase on the previous quarter, although demand is down by -16.3% on an annual basis.

With current demand at 45.2%, Bournemouth tops the table as the most in-demand city for new-build homes, while Liverpool is currently home to the lowest level of buyer demand at just 2.7%.

However, it’s Cardiff that has seen the largest quarterly uplift, with buyer demand for new homes climbing by 10.4% in Q1 versus the final quarter of 2022.

In contrast, Swansea has seen the largest quarterly decline with demand down -11.8% quarter to quarter.

London sits mid-table where current demand is concerned (16.8%), although the capital has seen the fourth largest quarterly increase at 3.1%, with Southampton (5%) and Nottingham (3.6%) the only cities – along with Cardiff – to see a higher quarterly increase.

London is also one of just two cities to have seen an annual increase in buyer demand for new-build homes, with current demand sitting 2% higher than this time last year, along with Aberdeen where demand is also up 2% annually.

Where stock levels are concerned, new homes currently make up 7.5% of all available for sale stock on the market, a drop of -0.6% while this level of stock has also remained largely static on an annual basis at an increase of 0.3%.

CEO of Alliance Fund, Iain Crawford, commented:

“The first quarter of the year can often bring a more subdued level of new-build market activity following on from the seasonal break, but it’s fair to say that it’s been a tad quieter than usual.

Buyers and developers alike have been sitting tight since the final quarter of 2022 following the uncertainty spurred by September’s mini budget and this has largely contributed to static levels of demand.

However, 2023 has begun on a far stronger note and it’s clear that market confidence remains high amongst the nation’s buyers. As a result, we expect new-build market activity to continue to gain momentum as the year progresses and as developers push on with their intended plans to deliver stock to the market.”