New Build Housing Sector Shows Signs of Recovery with 40% Increase in Registrations

The UK's new build housing sector is showing signs of recovery according to the latest figures from the National House Building Council (NHBC). The organisation, which is the UK's largest provider of new home warranties and insurance, reports that new home registrations have increased by 40% in the third quarter of 2024 compared to the same period last year.

The data reveals that 28,724 new homes were registered to be built in Q3 2024, marking a significant increase from the 20,449 registrations recorded in Q3 2023. This quarter's figures also maintained parity with the preceding quarter (Q2 2024), which saw 29,093 registrations.

NHBC Chief Executive Steve Wood expressed measured optimism about the figures, stating that new home registrations are "holding steady with some signs of increased activity on site and an emerging mood of cautious optimism amongst house builders."

The private sector showed particularly strong growth, with registrations rising by 58% to reach 19,879 in Q3 2024, compared to 12,583 in the same period last year. The rental and affordable housing sector also saw growth, albeit more modest, with registrations increasing by 12% to 8,845, up from 7,866 in Q3 2023.

Regional performance varied significantly across the UK, with ten out of twelve regions experiencing growth in registrations compared to Q3 2023. The South East led the way with an 84% increase, followed by the North West and Merseyside at 81%, and the North East at 78%. However, London and Northern Ireland bucked this positive trend, recording decreases of 50% and 29% respectively.

Despite these encouraging figures, Wood emphasised that further growth is needed to meet the government's target of 1.5 million new homes. He noted that progress towards this goal "depends on continued easing of interest rates and a rise in confidence amongst consumers and investors." He also welcomed the funding pledged in Chancellor Rachel Reeves' first Autumn Budget, suggesting it should positively impact housing supply over time.

The rental and affordable housing sector faces particular challenges, with Wood highlighting that housing associations are currently prioritising "remediation and retrofit of existing stock, alongside high spends on temporary housing."

Looking ahead to 2025, the NHBC anticipates an upward trajectory for new home registrations. However, Wood cautioned that persistent challenges in the planning system and ongoing skills shortages within the construction industry need to be addressed to maintain this momentum.

These figures suggest a tentative recovery in the new build housing sector, though the path ahead remains complex as the industry continues to navigate various challenges while working towards meeting the government's ambitious housing targets.