Signs of improvement in London but analysts caution that capital’s data is most volatile

New home registrations fell in the second quarter as developers slowed housebuilding activity, figures from the National House Building Council (NHBC) show.

Data released today by the warranty provider shows 29,162 new homes were registered to be built in Q2 226, down 4% from 30,259 in the same period the year prior.

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Source: Shutterstock

Private sector registrations fell even further, down 5% from 20,097 to 19,045, while registrations in the rental and affordable sector were broadly unchanged, standing at 10,117, compared with 10,162.

“Elevated interest rates, geopolitical volatility and rising costs combined with affordability pressures impacting consumer demand, meant that many house builders slowed their build programmes in the second quarter,” said Daniel Pearce, chief strategy officer at NHBC

He said the decline came as “little surprise” and welcomed the new prime minister’s ambitious housebuilding commitments, which he said would be “an important lever in boosting overall supply”. 

“Greater clarity on the mechanisms and funding to deliver this will be welcomed by the industry and house builders stand ready to play their part,” he added.

Six out of 12 UK regions saw a decline in registrations, with the biggest decreases seen in the South West, East Midlands and Wales.

There were however tenative signs of a rebound in London, which saw the biggest uplift following plummeting registrations earlier this year. Registrations rose from 896 to 2,417 in the capital quarter-on-quarter.

Pearce cautioned against drawing too much encouragement from the capital’s data, noting that “registration volumes in London are often more volatile than elsewhere in the country, with large developments frequently registered over short periods rather than evenly throughout the year”. 

He said the next two quarters of data would provide a clearer indication of the trend for London.

NHBC covers more than 70% of the warranty and insurance market and its figures for pre-construction registrations are widely used as an early economic indicator for housebuilding activity.