Recent data released by the National House Building Control (NHBC) unveils a concerning trend in the housing market. Paul Atkins, Partner and Head of Property Tax, explores this further within his article published in Property Week.

Last year, a total of 133,213 new homes were completed, marking a 12% decline compared to the previous year’s figure of 151,308. However, the more concerning trend is the substantial drop in the intention to construct new homes. In 2023, this intention plummeted by a staggering 44% to 105,449, down from 189,022 in 2022.

Building houses is a financially demanding endeavor, especially when done on a large scale. Until the end of 2021, the prevailing robust macro-economic climate allowed for manageable upfront costs, which were considered necessary investments with anticipated returns. However, the situation changed in 2022. Interest rates surged from 0.25% to the current 5.25%, and coupled with high inflation, both the cost of living and construction expenses escalated. These factors have eroded consumer confidence and inflated costs for housebuilders.

Paul provides some possible solutions for housebuilders to implement within his Property Week article, here.