The UK’s most profitable new build markets – Show House (2024)

FAQs

Is the UK building enough houses? ›

Compared to the average European country, Britain today has a backlog of 4.3 million homes that are missing from the national housing market as they were never built. This housing deficit would take at least half a century to fill even if the Government's current target to build 300,000 homes a year is reached.

UK Housebuilders' pre-tax profit margins currently range from between about 12% and 30%.

However, new builds will appreciate in line with regular housing and what you might not get in equity purchase you can make up for in incentives such as your stamp tax and legal fees being covered. It's also really important to remember that you should only buy a new build if you plan to live there for a few years.

Lack of available land

For homelessness charity Shelter a shortage of available building land is the main reason for the housing shortage. "We fail to provide enough land at prices that make it possible to build decent, affordable homes," a spokesman says. Land prices have inflated "massively", Shelter says.

4) Lack of Smaller Builders

The delivery of housing in the UK is concentrated in few hands, with the financial crisis driving an estimated 7,000 smaller builders out of the market. Banks are now reluctant to lend to smaller firms who may be seen as more of a gamble than their well-established counterparts.

The average yearly earnings of a builder in the UK can range from around £11,700 per year for an apprentice, up to £81,000 per year for a business owner. But actual earnings for a builder will depend on your experience, skills, qualifications, the type of work, and where you live / work.

Most properties on the open market will cost you far more than a house built from scratch. When you buy a ready-made home, you're paying not just for the land, materials and labour, but also for the convenience. So if you're prepared to take the trouble, building a home yourself can be a huge money saver.

The typical size of a three-bedroom home can range from around 90 square metres to 120 square metres, meaning the cost of building a three-bedroom house can range from around £126,000 to £300,000 with an average cost of around £213,000.

Is it better to buy a new build or old house UK? ›

New-build homes can be more energy-efficient, making them cheaper to heat and run. Newer homes often have better insulation, may be double or triple glazed and also have the advantage of a more modern boiler, which can all help homeowners to save cash.

The property market has long been an important element of the UK economy. It has proved to be an excellent way to generate and accumulate wealth over the long term, either through personal investment property portfolios or as a component of one of the UK's many institutional portfolios and pension funds.

When considering investments in the UK in 2023, property stands out as a compelling option for long-term growth and financial stability. Property investment offers various advantages, including potential capital gains and the ability to leverage tax benefits. One significant factor to consider is capital gains tax.

You can negotiate a lower offer on a new build, with many buyers offering around 15% under the asking price. This is because new builds are sold with an included premium, making them more expensive than existing properties.

Most experts believe that we need to build 250,000 new homes per year, whilst over the last decade we have averaged just 130,500 per year. New housing development is important to health of the UK economy.

Official data has already shown falls in house building. April figures showed total construction volumes were 3.6% higher than a year earlier, but new housing was down 6.1%, the biggest annual decline since January 2021.

The ongoing decline in housebuilding is expected, given the downturn in the market as rising interest rates and inflation continue to weaken demand, especially among those looking to buy property for the first time. “The housing activity index falling to 39.6 is at the lowest level since the pandemic in May 2020.

Cities with the biggest housing shortages are primarily concentrated in the Greater South East of England such as London and Brighton.