Sales of new homes in the last three months of 2007 were 15% lower than they were during the same period in 2006.
Statistics compiled exclusively for Building by warranty provider NHBC reveal that housebuilders’ average daily sales dropped from 619 to 528 year on year.
The problem was worst in December, when an average of 598 homes were sold each day, compared with 732 in the same month of 2006 – a fall of 18% (see table below).
The changes follow unrest in the housing market in the wake of the credit crunch. Taylor Wimpey, Barratt and Bellway are trying to cut payments to supply chains and Persimmon is closing three regional offices.
Barratt last week revealed that its forward order book stood at £1.26bn, 6% down on the combined order books of itself and its recent acquisition Wilson Bowden at this point in 2006.
The NHBC figures also show that the downturn is starting to translate into reductions in housing starts. In December there was a significant decline in starts on the previous year, with NHBC registrations down 4%.
Overall, however, registrations were up sharply in the final quarter of 2007 compared with 2006, from 30,487 to 42,534.
Government figures for England suggest starts have been slipping back over the past year
Richard Donnell, Hometrack
So far, falling sales have barely affected completions. Rates dropped 1% from 45,243 in the fourth quarter of 2006 to 44,573 in the same period in 2007.
Richard Donnell, director of research at housing analyst Hometrack, said the figures were unsurprising.
He said: “Government figures for England suggest that starts have been slipping back over the past year. But I think it’s going to take time for that to feed through into more completions.”
He added: “The greater change comes from apartments. Houses are a slightly different proposition – you can phase them and match supply to demand.”
Kevin Williamson, chief executive of the National Housing and Planning Advice Unit, said houses would not become more affordable, despite a short-term cooling of the market.
He said: “With the credit crunch, we are seeing confidence issues and various other things coming together that mean we are facing a more difficult outlook than 12 months ago, but this will not lead to a dramatic improvement or solution to the affordability problem, which is as acute as ever.”
Building’s new housing section features a full analysis of the housing market.