Sun 28 Jan 2024
The year 2023 witnessed a dynamic interplay between the UK property market and the construction sector, with close to 240,000 new build completions. While this figure falls short of the government's ambitious 300,000 target, it signals resilience in the face of market challenges, including the lingering impacts of Covid-19.
Since 2018, new build completions in the UK have consistently surpassed the 240,000 mark, demonstrating a robust trend. However, the year 2023 witnessed an overall decline of -8.6%, indicative of a slowdown in response to a more sluggish sales market. This decline, while expected in a slower market, prompts a closer examination of regional variations.
Unsurprisingly, the more expensive regions, particularly London and the South East, experienced a more pronounced slowdown, with both regions witnessing a 14% decrease in new build completions compared to 2022. This decline raises questions about the impact of affordability on buyer demand and the potential role of prohibitive land costs in shaping the market landscape.
Several factors may contribute to the observed slowdown in new build completions. Firstly, many projects completed in 2023 were initiated well before the rise in interest rates. Secondly, the absence of the Help to Buy scheme has left developers grappling with changed circumstances, impacting their ability to attract buyers and complete projects.
Considering the challenges faced in 2023, there is a likelihood that the number of new build completions may decrease further in the coming years. Developers, adjusting to changing market conditions and regulatory shifts, will need to strategise for a landscape shaped by rising interest rates and the absence of government incentives.
The dynamics of the UK property market in 2023, as reflected in new build completions, offer valuable insights into regional variations, affordability concerns, and the impact of policy changes. While challenges persist, the industry's adaptability and resilience will undoubtedly shape the trajectory of the market in the years to come. Investors, developers, and homebuyers alike must remain vigilant and adaptable in navigating this evolving landscape in Epsom & Surrey.