Shortage of supply drives Herts’ off-plan sales up

Published:
2:35 PM March 28, 2022



A property shortage is leading to an increase in off-plan sales in England and Wales, and Hertfordshire is seeing a greater proportion of these transactions than almost anywhere else.

According to new research from Hamptons, East Hertfordshire and Welwyn Hatfield were among the 10 local authorities with the highest percentage of off-plan sales in 2021.

In East Herts, 67% of new homes completed last year were sold before they were built, behind Cotswold (86%) and Monmouthshire (74%). In Welwyn Hatfield, the figure was 65%.

Only two of the 10 local authorities with the highest proportion of homes sold off-plan in England and Wales last year were in London, compared to six five years ago.

Top 10 local authorities with the highest percentage of off-plan sales (2021)

cotswolds

86%

Monmouthshire

74%

Southwark

67%

East of Hertfordshire

67%

Gravesham

67%

Sandwell

65%

Calderdale

65%

Hackney

65%

Welwyn Hatfield

65%

Thurrock

63%

Source: Hamptons and Land Registry

The drop in the number of properties for sale fueled the first increase in new homes sold off-plan since 2016, Hamptons said.

In 2021, 37% of new homes sold in England and Wales found a buyer before being built, up from 35% in 2020 but below the peak of 47% recorded in 2017.

Buyers handed over a record £1.1billion in deposits to secure homes ahead of construction last year, with smaller projects with fewer than 10 homes seeing the biggest increases in off-plan sales between 2020 and 2021 .

David Fell, senior analyst at Hamptons – who used Land Registry data to produce this analysis – said: “The lack of second-hand homes available to buy has meant that homeowners are increasingly turning to new builds, with more willingness to buy off-plan in the face of limited options on the market. Marlet.

“Typically it’s landlords without a chain who have more flexibility on move dates.

“Despite this, homeowners don’t buy as far in advance as investors who are often content to wait a year or two, especially when prices rise.

“They are also more likely to seek bespoke, individually designed homes in smaller projects, rather than apartments in larger city center blocks.”

David added: “After nearly four years of slumps, the rise in off-plan sales will provide respite for developers looking to maintain sales rates as buying aid draws to a close.

“It remains to be seen whether this short-term change has the potential to turn into a longer-term trend, but unlike in the past, it is homeowners rather than investors who are likely to continue to drive sales on plans in 2022.”

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