Christmas is not the time to find New Build bargains

0:01 AM, 5th December 2019, About 4 years ago 2

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The latest research by new homes specialist, Stone Real Estate, has revealed that the level of new build properties being sold accelerates as we head into December, while sales across the regular market drop a gear in the run-up to Christmas.

The research shows that on average over the last five years, the number of new build transactions in December accounts for 11.9% of total new build transactions for the year. In contrast, the number of existing homes sold during the last month of the year accounted for just 8.2% of all sales on average.

What’s more, December is the only other month of the year where new build sales hit double-digits as a percentage of total yearly sales along with June, with both months consistently ranking as the busiest in the new build calendar over the last five years.

There is also a clear trend whereby the number of new-build sales falls considerably following the June peak and then slowly gains momentum heading towards Christmas. On the other hand, existing property sales tend to see a gradual decline from August and September heading into the festive season.

Founder and CEO of Stone Real Estate, Michael Stone, commented:

“The new build sector doesn’t come under the same seasonal strain when it comes to sales transactions when compared to the existing sector. This is largely because new build sales involve one buyer and on the other side of the coin you have a professional entity that continues to work right up until the Christmas break to get a sale over the line.

“This should be the case with any good estate agent, however, as there is no lengthy chain to deal with or any of the other complications that can come with an existing property sale, the process is all the quicker. As a result, when the December rush to complete before or just after Christmas hits, the new build sector is much better placed to facilitate a greater number of sales despite the shorter time frame.

“One common misconception is that Christmas is a great time to find a bargain and while true to an extent, historically new build house prices tend to stand firm, and in many cases sit higher than many previous months in the year. That said, developers will often include some festive incentives to persuade buyers to take the plunge and this, of course, all helps favourably towards their end of year figures.”

Five Year Look
Sector	December Sales as a Percentage of Annual Sales
New Build Average	11.90%
Existing Average	8.20%

Date/Month	New Build Sales as % of All Yearly Sales	Existing Sales as % of All Yearly Sales
2014
2014-01-01	5.1%	7.4%
2014-02-01	6.1%	7.2%
2014-03-01	8.3%	7.3%
2014-04-01	7.3%	7.8%
2014-05-01	8.3%	8.5%
2014-06-01	13.4%	8.4%
2014-07-01	7.2%	9.4%
2014-08-01	7.6%	9.8%
2014-09-01	8.3%	8.6%
2014-10-01	8.5%	9.5%
2014-11-01	7.9%	8.1%
2014-12-01	12.0%	8.1%
2015
2015-01-01	4.6%	6.5%
2015-02-01	5.3%	6.5%
2015-03-01	8.4%	7.2%
2015-04-01	7.6%	7.0%
2015-05-01	8.9%	8.0%
2015-06-01	14.1%	8.6%
2015-07-01	8.0%	10.3%
2015-08-01	7.8%	9.3%
2015-09-01	8.9%	8.9%
2015-10-01	8.4%	10.0%
2015-11-01	7.5%	9.0%
2015-12-01	10.5%	8.8%
2016
2016-01-01	4.5%	7.0%
2016-02-01	5.1%	7.5%
2016-03-01	9.2%	13.6%
2016-04-01	7.4%	5.8%
2016-05-01	7.5%	6.7%
2016-06-01	12.5%	7.8%
2016-07-01	7.3%	9.0%
2016-08-01	7.5%	9.1%
2016-09-01	8.8%	8.6%
2016-10-01	8.4%	8.0%
2016-11-01	8.7%	8.3%
2016-12-01	13.2%	8.4%
2017
2017-01-01	5.0%	6.7%
2017-02-01	5.7%	7.0%
2017-03-01	9.3%	8.4%
2017-04-01	7.1%	7.2%
2017-05-01	8.2%	7.9%
2017-06-01	13.2%	9.2%
2017-07-01	6.9%	9.0%
2017-08-01	6.9%	9.7%
2017-09-01	8.6%	9.0%
2017-10-01	8.1%	8.9%
2017-11-01	8.6%	8.8%
2017-12-01	12.3%	8.2%
2018
2018-01-01	5.2%	7.0%
2018-02-01	6.2%	6.9%
2018-03-01	9.0%	7.9%
2018-04-01	6.9%	7.0%
2018-05-01	7.7%	8.1%
2018-06-01	13.9%	8.7%
2018-07-01	6.9%	9.0%
2018-08-01	7.4%	10.4%
2018-09-01	8.1%	8.2%
2018-10-01	8.2%	9.2%
2018-11-01	8.8%	9.8%
2018-12-01	11.7%	7.7%

Date sourced from the Land Registry House Price Index: New Build vs Existing
Founder and CEO, Michael Stone, has over 20 years experience in the new homes sector
Michael previously worked at Countrywide as their Head of New Land and Homes

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Comments

Don Collie

12:24 PM, 5th December 2019, About 4 years ago

By inspection, those stats show two peaks: in June and December. Might this more likely be house-builders pushing for sale completions just before their half-yearly dividend payouts/end-of-year accounts (so that the MDs get their £100m bonuses).
Maybe also that builders push for half of builds to start in the better weather so that they can get out of the ground and roof on during Summer, finish internally during Autumn and complete just before Christmas? Then After Christmas the cycle starts again to sell a peak of the other half of builds in June (given that it takes about six months to build a house). The cycle is continuous of course, but with the twin peaks.

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Graham Davidson

8:19 AM, 7th December 2019, About 4 years ago

It has everything to do with year end and half year end. Any stock units available at these two times will be discounted until it sells. So it is the time to grab a bargain and the headline of this article is wrong.

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