Last year a third (33%) of new build completions were sold off plan, down from 35% in 2019 and a peak of 39% in 2016, research from Hamptons has found.
New flats (50%) are more likely to be sold off-plan than houses (30%), while over half (52%) of new homes completed in London last year were sold off-plan.
At a local authority level, Spelthorne in Surrey had the highest percentage of off-plan completions last year (81%). Spelthorne was followed by London’s Waltham Forest (80%) and Lambeth (77%).
David Fell, senior analyst at Hamptons, said: “Securing off-plan sales is fundamental to the health and profitability of most new developments.
“By selling some homes before they are built, developers can reduce the sales period and generate an income before the scheme is complete, often using the money to fund ongoing works and repay loans.
“While overall fewer new homes were sold off-plan last year than in 2019, there was an increase in houses sold off-plan. The post-pandemic space race which has driven country markets, has also fuelled off-plan house sales.
“Owner-occupiers have proved increasingly likely to commit to a house off-plan, although typically this tends to be months rather than years before completion.”
He added: “The introduction of the 3% stamp duty surcharge in 2016 proved a tipping point. Since then, fewer homes have been sold off-plan.
“Typically investors are more likely to commit to buying a home during or pre-construction than any other buyer type but with fewer investors in the market, it has become harder to sell homes off-plan.
“However Help to Buy has softened this blow, with around four in ten new homes sold using the scheme.”