The number of new home registrations fell by 42% in the second quarter of this year compared with the same period in 2022, according to a warranties and insurance provider.
The National House Building Council (NHBC) said 38,044 new homes were registered in the months of April, May and June, down from 65,645 in the same period a year earlier.
Completions also fell by 11% over the same period, which the NHBC suggested was due in part to rises in mortgage rates dampening demand.
Across the UK, 35,936 new homes were completed in the second quarter of 2023.
Within the total, 11,190 completions were in the rental and affordable sectors, marking an increase from 10,400 in the second quarter of 2022.
The NHBC has a 70% to 80% share of the UK warranty market.
Its figures indicate the stock of new properties in the pipeline as homes are registered with the NHBC before being built.
While new home registrations are down... activity on site continues at a steady pace with builders focused on completing homes already in the pipeline— Steve Wood, NHBC chief executive
There were 24,783 private sector registrations in the second quarter of 2023, down 51% on the same quarter in 2022.
The affordable and “build to rent” sector recorded a shallower decline, with 13,261 registrations in the second quarter of 2023, down 14% on the second quarter of 2022.
NHBC chief executive Steve Wood said: “It is hardly surprising that consumer demand for new homes began easing in the second quarter.
“While new home registrations are down in (the second quarter of) 2023, activity on site continues at a steady pace with builders focused on completing homes already in the pipeline.
“The increase in completions in the rental sector may signal a renewed focus on affordable housing, helping to address some of the underlying demand for new homes among those impacted by higher mortgage rates.”
The NHBC said there was a “mixed picture” across the UK, with London and Wales experiencing increases of 9% and 1% respectively in new home registrations compared to the same period last year, while North West England (minus 67%), North East England (minus 60%) and Eastern England (minus 56%) saw the biggest falls in registrations.
The report was released as separate figures from Nationwide Building Society showed the total value of spending on mortgages by its members was up by 14% in June compared with the same month a year earlier, while spending on rents increased by 19%, compared with June 2022.
Housing Secretary Michael Gove recently used a speech in London to set out a range of planning reforms, including on leasehold reform, simplifying planning procedures, expanding planning capacity, and regenerating and reviving inner cities.
