Value of new homes drops by £5bn, research says

Research by property developer, StripeHomes, has revealed a significant drop in the value of new builds. 

Despite a 4.5% annual increase in the value of new homes, a -10.8% annual decline in the number of new homes reaching the market means the total value has dropped by -6.7% over the last year. 

Researchers collected data and analysed the change in new-build stock delivery and market values to see how they’ve changed since the pandemic began.

It was found that 216,489 new homes were delivered to the property market across England in 2020/21, a -10.8% decrease from the previous year. 

Simultaneously, the average value of a new-build rose by 4.5% to £318,196, as house prices overall are rapidly increasing. 

The total value of new housing delivered to market was £69bn, which was -6.7% less than the £74bn made the previous year. 

StripeHomes also found that a dip in stock has caused only two regions in the UK to see an annual increase in the total value of new homes built, despite individual values of new-builds increasing everywhere. 

One region, the East Midlands, saw an 1.9% increase in the total value of new-builds, despite the volumes of housing decreasing by -3.6%.

 In the South West a minimal increase of 0.8% was felt, although the volume of new housing had decreased by -4.2%. 

Managing Director of StripeHomes, James Forrester, commented: ‘The new-build sector has been working overtime to maintain stock delivery in what has been a couple of very challenging years for a whole number of reasons.  

‘Covid restrictions, labour shortages and the increasing cost of materials, amongst other things, have all posed problems for the nation’s housebuilders and so the knock on effect was inevitably going to be a dent to the volume of stock delivered.  

‘Even a pandemic property price boom hasn’t been enough to bridge the gap where the total value of this stock is concerned, although it’s fair to say they’ve still put in a tremendous shift given the difficult circumstances and we take our hat off to them.’

Photo by James Feaver