Cost of living begins to bite causing slowdown in demand for new homes
The demand for new homes has fallen to pre-pandemic levels, signaling a slowdown in a previously accelerating demand.
Rent Guarantee Insurance for £299
- ✓ Covered for £2,500 per month
- ✓ Claim up to £25,000
- ✓ Free access to legal advice
This cooling follows a 3-month period of sustained growth in house hunting, according to new research from WhatHouse.com
Searches for new build homes slowed by around 7 per cent in April, according to the data.
The research suggests that worries about the cost-of-living crisis is concerning prospective buyers across all new home sectors including, luxury, Help to Buy and retirement.
Many buyers may hit pause on new homeownership until affordability is more certain, regardless of their life stage.
Even though house searching has cooled by 7% last month, the previous three months saw unparalleled, sustained growth.
Home searches returning to pre-pandemic levels
Search figures for new build homes has returned to pre-pandemic levels, which is a strong indicator that general market sentiment remains healthy for the time being.
Managing Director at WhatHouse.com, Daniel Hill, said the first three months of 2022 represented a seemingly limitless surge in buyers’ interest in new build homes, as people took action to achieve their long-planned lifestyle goals once final pandemic restrictions were lifted.
Now as the cost-of-living crisis bites, the brakes are starting to go on. We’re seeing an early wave of home hunters reconsidering new home searches and delaying research into suitable developments.
Additionally “The reality of housing affordability and continued economic uncertainty means this slowing looks set to carry on through May and for the remainder of the summer.”
Significant numbers of house buyers have saved enough to buy
He added that they don’t expect search interest to “fall off a cliff” and there remains a “significant number” of people who have taken the opportunity to save over the past two years, who are now able to take advantage of the relatively affordable cost of borrowing to step-up to a new build.
We are by no means in a crisis, and the new homes market should see a positive year provided that the economy doesn’t significantly worsen more quickly than anticipated
May is traditionally one of the best months for home hunter interest and WhatHouse.com anticipates that the month will close on a slightly lower than expected search total.
It suggests that buyers are still able to take advantage of a relatively affordable cost of borrowing.
Mashroom offers a variety of advice when it comes to borrowing, from buy-to-let mortgages to first time buyers and remortgaging. To find out more click here.
