The proportion of off-plan home purchases in England and Wales fell last year to the lowest level since 2014, according to Monday’s inaugural Off-Plan Sales Index from Hamptons.
Of the new homes that were built last year, 33% were sold off plan—meaning they were bought before or during construction and prior to completion—equating to roughly 49,000 residences.
That’s a drop from 2019 when the metric stood at 35%, according to the online brokerage, which will publish the data twice yearly going forward.
While the proportion of deals being made on apartments before completion dropped from 58% in 2019 to 50% in 2020, a record share of houses were sold off plan last year.
Off-plan house completions rose from 29% in 2019 to 30% in 2020, underlining the increased demand for single-family homes that has emerged from the coronavirus pandemic as buyers prioritize more space and gardens.
Despite the shifting popularity, flats are still more likely to be sold off plan than houses, the report said.
“The post-pandemic space race which has driven country markets, has also fueled off-plan house sales,” David Fell, senior analyst at Hamptons, said in the report. “Owner-occupiers have proved increasingly likely to commit to a house off-plan, although typically this tends to be months rather than years before completion.”
London continued its long-standing reign as the hotspot for off-plan sales in England and Wales in 2020. Of the homes that were newly built in the city last year, 52% of them were sold before they were completed.
“Securing off-plan sales is fundamental to the health and profitability of most new developments,” Mr. Fell said. “By selling some homes before they are built, developers can reduce the sales period and generate an income before the scheme is complete, often using the money to fund ongoing works and repay loans.”
Article Source: Mansion Global