Savills has given an upbeat assessment of how the new homes sector has performed so far in 2024 - but it is laced with a warning too.
In terms of the good news, Savills says the relatively optimistic mood on interest rates in January and February meant that net reservations of new homes spiked to a net balance of +21 in February relative to last year. Sales rates amongst major house builders have also improved to an average of 0.77 per outlet per week in March, up from 0.59 at the end of 2023.
Savills says: “The flurry of activity at the start of the year demonstrates the depth of pent-up buyer demand that can be released when the cost of debt eases. The latest predictions are that the bank base rate will be cut within the next few months – with financial markets now pricing it in for August. Although the market may be stop-start until that point, a rate cut will likely result in more market activity in the second half of the year. Our longer-term outlook for the market expects increasing activity and capacity for price growth from 2025, helped by a stronger economic performance and a steady reduction in the bank base rate.”
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