The New Home market in 2021 is different to what everyone expected a year ago when Covid struck first.
The first surprise is that prices have not dropped; in fact, prices are moving upwards for all new homes. There are two fundamental reasons for this. First, there is a limited supply of new homes coming onto the market due to the restricted opening of the sites over the past year. Second, Covid restrictions meant that building sites were closed over the past year. Added to that is the extra delays in construction when workers adhere to Covid restrictions. This all means that there is an increasing shortage of new homes.
Added to the shortage of new stock is the fact that demand has increased. Buyers have been saving strongly, and those with full employment in the many sectors not negatively impacted by Covid are stronger than ever. In addition, people are looking at prices of new homes remaining strong or increasing in the coming years as building costs increase for a range of reasons, Brexit, green regulations, additional workplace expenses and raw materials.
There is some good news for the new home market, but it will be next year. By 2022 there will be a much greater supply as construction gets over Covid and sites are back to full production. Figures of new sites due to complete in the next 18 months are very healthy. Developers will commit to this market aware that post-Covid will be a lot of money released into the economy to recover the Covid lost year. Industry sources are all very positive that 2022 will see record numbers of completions of new homes, which will increase choice and maintain stable prices.
So if you are not ready to enter the market till later this year or next year, do not despair; better opportunities are coming.