New Build Supply Creates Trouble For Buyers

The number of new homes starting to be built in 2012 fell by 11%, compared to 2011. This comes from the findings of the property builders Barratt, who also claim that the number of new homes finished this year, has only risen by 1% from 2011.

Despite the decreases in the last year, 2012 levels are strong compared to 2009, with starts to new builds 58% higher than the second quarter of 2009. However, this is still 42% below the pre-recession market of quarter two in 2007.

The result of such findings have led to Mark Clare, CEO of Barrett Developments, to suggest that a shortage of properties is now the biggest problem facing those looking to purchase; as opposed to the challenge of obtaining a mortgage approval.

He said that ‘finance has become a little easier’ which is positive. The trouble is that some ‘customers are overestimating the size of the deposit that they would need, particularly as NewBuy becomes established in the market.’ This has meant some people have avoided looking at purchasing a newly built house.

He comments further that this low level of market activity has continued in line with the ‘scarcity of property to buy.’

If Mark Clare’s conclusions are correct, it may be that the new build mortgage market will continue to slow if the supply of housing does not improve.