Is The Market Really That Bad

ReadySteadyPop

ComicGeek said:

It doesn't help that the numbers of new build properties being built is also falling. The 1st quarter of this year had the lowest number of completed dwellings since 2014 according to the ONS. They haven't released data on the 2nd quarter yet, but other figures released show a significant reduction from recent years, particularly in London.

That has an impact on the general housing market. 

Yes it certainly does.

https://www.thisismoney.co.uk/money/mortgageshome/article-15011041/New-build-prices-PLUMMET-one-region-seeing-homes-drop-43-000-year.html

https://www.propertyreporter.co.uk/new-build-sales-fall-62-as-mortgage-market-changes-improve-access-for-buyers.html

WIAWSNB

Naive Q of the month - I'd have thought fewer new builds would mean more existing house demand? How can it cause prices to fall?
Ta.

GDB2222

WIAWSNB said:

Naive Q of the month - I'd have thought fewer new builds would mean more existing house demand? How can it cause prices to fall?
Ta.

Fewer new builds reflect the market having already softened. The builders are reluctant to pour cash into stock they can’t sell. 

Yes, you are right that less supply means higher prices, but demand can dry up very quickly too, as people can hang on longer in whatever accommodation they already have. A mortgage of 6+ times gross earnings can take half a lifetime to pay off, so there’s quite a bit of optimism required to take that burden on, and a change in sentiment can put people off. 

Right now interest rates are high enough that there’s no great saving in monthly outgo through buying. Indeed, it may cost more. If that shiny new apartment is going to lose 10% the minute you occupy it, and there’s no obvious prospect of house prices going up in the near future, there’s a significant loss that most people are aware of. It may not matter too much unless you move, but it is still a loss.

I saw a news article that one in six London developments have been put on hold. 

GDB2222

There’s also the question of whether people want the property being built. It’s mostly flats, which don’t have a universal appeal. 

ReadySteadyPop

GDB2222 said:

WIAWSNB said:

Naive Q of the month - I'd have thought fewer new builds would mean more existing house demand? How can it cause prices to fall?
Ta.

Fewer new builds reflect the market having already softened. The builders are reluctant to pour cash into stock they can’t sell. 

Yes, you are right that less supply means higher prices, but demand can dry up very quickly too, as people can hang on longer in whatever accommodation they already have. A mortgage of 6+ times gross earnings can take half a lifetime to pay off, so there’s quite a bit of optimism required to take that burden on, and a change in sentiment can put people off. 

Right now interest rates are high enough that there’s no great saving in monthly outgo through buying. Indeed, it may cost more. If that shiny new apartment is going to lose 10% the minute you occupy it, and there’s no obvious prospect of house prices going up in the near future, there’s a significant loss that most people are aware of. It may not matter too much unless you move, but it is still a loss.

I saw a news article that one in six London developments have been put on hold. 

Good points, FOMO and expectations of making money from property are no longer part of buyer psychology.

ReadySteadyPop

GDB2222 said:

WIAWSNB said:

Naive Q of the month - I'd have thought fewer new builds would mean more existing house demand? How can it cause prices to fall?
Ta.

Fewer new builds reflect the market having already softened. The builders are reluctant to pour cash into stock they can’t sell. 

Yes, you are right that less supply means higher prices, but demand can dry up very quickly too, as people can hang on longer in whatever accommodation they already have. A mortgage of 6+ times gross earnings can take half a lifetime to pay off, so there’s quite a bit of optimism required to take that burden on, and a change in sentiment can put people off. 

Right now interest rates are high enough that there’s no great saving in monthly outgo through buying. Indeed, it may cost more. If that shiny new apartment is going to lose 10% the minute you occupy it, and there’s no obvious prospect of house prices going up in the near future, there’s a significant loss that most people are aware of. It may not matter too much unless you move, but it is still a loss.

I saw a news article that one in six London developments have been put on hold. 

https://www.theguardian.com/business/2025/oct/23/foxtons-warns-of-subdued-sales-as-budget-uncertainty-deters-homebuyers

ReadySteadyPop

GDB2222 said:

There’s also the question of whether people want the property being built. It’s mostly flats, which don’t have a universal appeal. 

That`s right, new-builds (used to be) popular for some reason.