The proportion of property transactions accounted for by the new-build sector hit its lowest level in a decade in 2020, research from Warwick Estates has found.

According to the property management firm, the Cladding External Wall System (EWS) form caused a bottleneck for new-build homebuyers.
 
Warwick Estates analysed data from the UK House Price Index on new-build sales levels as a percentage of all homes sold between 2010 and 2020.

These figures revealed that in 2010, new-build homes accounted for 9.6% of all sales. Disregarding a negligible decline of -0.2% from 2013 to 2014, new-build market share increased steadily and consistently to a high of 13% in 2019.
 
In 2020, however, the sector’s market share dropped to just 8.8% of all sales. Not only was this -4.2% annual decline the biggest drop in 10 years, but it also sunk the new-build sector’s market share to the lowest point of the decade.
 
With the exception of Northern Ireland, all regions of the UK have seen the proportion of property transactions attributed to the new-build sector fall in 2020, with the North East (-6.3%), East of England (-5.2%) and North West (-5%) the areas seeing the largest year-on-year declines.

“A huge level of buyer demand spurred by the stamp duty holiday has helped revive buyer demand but such unprecedented levels of market activity have seen resources stretched,” commented Warwick Estates COO, Bethan Griffiths.

“While homes are going under offer at an alarming rate, there have been substantial delays during the back end of the transaction process.”

Warwick Estates stated that on top of the problems for the market posed by COVID-19, the government’s introductions of the EWS certificate in 2019 was “handled clumsily”, with buyers and developers left waiting for months to have their properties inspected and certified by a small number of qualified inspectors.

Without the certification, homes cannot be purchased and buyers who had agreed mortgages in principle were unable to complete on their purchase until certification was granted – leading to the 4.2% decline in the number of transactions last year.

Griffiths continued: “For the new-build sector, the situation has been exacerbated by the requirement of an EWS form and the ability to obtain these has become extremely difficult, with delays of six months or more in the worst cases.

“Despite attempts to remedy the situation by removing the requirement on buildings of 18 metres or less, we’re yet to see any real headway being made and the issue continues to prove problematic for those operating within the industry.”

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