… But more buyers looking to purchase closer to completion
Whilst the number of stock units is set to increase, encouragingly for the prime market, the nature of buyers has been changing considerably over recent years with more purchasers choosing to buy closer to or at practical completion. In 2015, on average, prime buyers would typically purchase 31 months off-plan. During the 12 months to H1 2018, the average length of time prime new build buyers were purchasing off-plan was just over 15 months. Owner occupiers tend to feature more heavily closer to practical completion. In previous years, buy-to-let investors have been an important source of demand for the new build market. These buyers are often prepared to purchase off-plan, enabling developers to unlock the development finance required to commence construction. However, investors, particularly those with mortgages in the UK, are facing more stringent mortgage regulation and taxation changes.
In a less certain economic and political climate and with a high supply of new build schemes, buyers are slower to commit to purchases and are taking their time to view all product on offer. As such, schemes that have the ability to differentiate themselves from the competition and that invest significantly in the marketing experience and sales process for the buyer will tend to do well. Hence, we are forecasting for sales volumes to remain stable over the next five years.