Headline figures from the NHBC show a decline of 7% in Q2 private sector registrations compared to the same period last year.
However, London’s slumping property market significantly pulled down the average with a 17% decline in the same period.
In stark contrast Northern Ireland, Eastern and Yorkshire & Humberside saw registrations rise by, 49%, 27% and 19% respectively.
NHBC Chairman, Steve Wood concluded “The demand for new homes across the UK remains strong, so this is encouraging news for the industry and for consumers who are looking to buy a brand new home.”
In summary, it appears outside of the capital, the new homes market remains strong with most house builders still pursuing a growth strategy on unit production.
German supermarket chain Lidl is planning a number of innovative schemes in London to create mixed use developments combining new supermarkets with new homes.
Their plans to create around 3,000 new homes is expected to assist in gaining planning approval in and around the capital over the next three years. Local authorities are expected to welcome a commercial developer willing to assist with their delivery of new homes.
Ed Fowkes, development director at Prosperity Capital Partners, said “By combining retail uses with residential units, developers can deliver much-needed homes in urban locations without compromising on the retail and commercial spaces which the local community depends on.”
So we can expect shoppers to be filling their kitchen cupboards and viewing a new home in a single trip to Lidl soon!
Last week the Bank of England finally decided to raise the interest rate to 0.75%, an increase of 0.25%. This is the highest level since March 2009 but, in historical terms, still incredibly low.
For most observers, this was no surprise and would have happened earlier in the year if the wider UK economic picture had been slightly more robust.
The ultra low interest environment has done much to underpin a recovery in the housing market over the past few years so any upward shift will naturally concern house builders. However, I think the question is whilst an increase in mortgage rates will theoretically dampen demand for new homes will there be a material practical difference?
On a variable rate mortgage of £150,000, the quarter of one per cent rate rise will increase mortgage payments by less than £20 a month. I would suggest that is unlikely to dissuade a new home buyer from going ahead with their purchase.