Off-plan purchases are falling rapidly as buy-to-let investors pull out of new builds, new data shows.

Property sales prior to completion were at the lowest level in 10 years in 2022, with just 34% of new homes sold off-plan, according to research by Hamptons.

Last year’s fall in off-plan sales was the fifth in six years, and they are now well below the peak of 46% seven years ago.

Just 21% of off-plan homes were bought by investors last year, down from 70% in 2016.

Meanwhile first-time buyers made up just over two-thirds (67%) of off-plan purchases last year.

Surpassed

The shift away from investors coupled with a change in where they were buying means that for the first time since at least 2007, new terraced houses (46%) have been more likely to sell off-plan than flats (44%).

And with flats making up over 90% of new homes in London, for the first time in at least 15 years, the capital didn’t account for the largest proportion of new homes sold off-plan.

Last year 44% of new homes in the capital were sold off-plan, down from a peak of 71% in 2016. This figure was surpassed by the North West where 45% of homes were sold in advance of completion in 2022, a similar level to 2016.

Without a relaunch of Help to Buy… in the short term it’s likely to mean far fewer homes”

David Fell, lead analyst at Hamptons, says: “Off-plan demand has steadily moved away from investors buying two or three years in advance towards first-time buyers who are typically looking to move home within 6-12 months.

“Without a relaunch of Help to Buy or replacement with a similar scheme, in the short term it’s likely to mean far fewer homes will be built in 2023 than there have been over the last couple of years.”