Max Turner, head of new homes at Savills in Ipswich, discusses the latest property trends.
Despite the well-documented rise in mortgage rates and increase to the cost of living, the new homes market shows remarkable signs of resilience.
Needs-based buyers – downsizers or first-time buyers (FTBs) for example – continue to be particularly active.
A cash-rich, older group also appears to be taking up a larger share of the market, with cash purchasers representing 40% of exchanges by Savills’ regional new homes teams in 2023 so far, up from 29% for the whole of 2022.
A further 18% plan to use cash once their previous property sells. Over half (58%) of Savills buyers this year have been reliant on cash for purchasing a new home, which is a 5% increase from 2020-22.
Almost a quarter (24%) of exchanges by our new homes teams have been to FTBs – in line with the average since 2020. The number of downsizers meanwhile has increased by 5%, up from 10% for the whole of 2022. Typically these buyers are also committed to a move over the longer term – wanting to release equity to fund retirement or help family onto the housing ladder.
A recent Savills survey shows low maintenance and no renovation costs is the top reason for buying a new-build property.
The second most popular reason is energy efficiency and saving money on bills. Quality insulation and air or ground source heat pumps are the priority green features amongst downsizers and FTBs alike, with less interest in solar panels or electric vehicle charging points.
Over half (57%) of FTB respondents said they had asked for more financial support from family. This is in stark contrast to just 3% of downsizers. Almost a third of FTBs ranked developer incentives as one of their main reasons for choosing a new build, suggesting these perks are helping drive demand.
Savills’ dealbook data also shows an adjustment in pricing, with the average pound per square foot falling by 4.6% compared to 2022 – in line with the wider UK market. However, the average value achieved has remained steady at 98.5% of asking price.
There will no doubt be a few twists and turns ahead as we move towards the end of the year. But new-build homes remain popular, and there is strong demand for correctly priced stock. Housebuilders however will need to continue to adapt and meet buyers’ changing needs to maintain market momentum.
For advice on the new homes market in Suffolk, please contact Max Turner at Savills Suffolk on 01473 234826 or MTurner@savills.com
