Off-plan new home sales slump to 12-year low as landlords retreat and rates bite

"Just 33 per cent of new properties across England and Wales were sold prior to completion in 2025, down sharply from a peak of 49 per cent in 2016. The slide reflects a perfect storm battering the housebuilding sector, with buy-to-let landlords beating a retreat from the market, stubbornly high interest rates dampening buyer appetite, and construction costs continuing to spiral."

"Off-plan sales have long served as the lifeblood of housebuilders' cash flow, allowing developers to bank deposits and secure financing well before a project reaches completion. Their decline now threatens to push up the cost of capital across the industry at precisely the moment ministers are pressing for an acceleration in delivery."

"The contraction has been driven, in large part, by the steady withdrawal of buy-to-let investors who have historically been voracious purchasers of off-plan stock, particularly flats in regeneration areas. The introduction of the 3 per cent second-home stamp duty surcharge in 2016 began the rot. That surcharge was hiked to 5 per cent at the end of 2024, and the Renters' Rights Act, which came into force this month, has prompted a further wave of landlords to head for the exits rather than wrestle with rising costs and ever-tightening regulation."

"First-time buyers, the other traditional mainstay of the off-plan market, are similarly hamstrung. Chain-free and typically flexible on timing, they have historically been natural candidates for purchases months ahead of completion. But higher borrowing costs, coupled with the closure of the government's Help to Buy equity loan scheme in 2023, have squeezed many of them out of the picture entirely."

Just 33% of new properties across England and Wales were sold before completion in 2025, down from 49% in 2016. Off-plan sales provide developers with deposits and financing before construction finishes, so the decline threatens industry cash flow and increases the cost of capital. Buy-to-let landlords have reduced purchases, especially for flats in regeneration areas, after the 3% second-home stamp duty surcharge introduced in 2016 and its rise to 5% at the end of 2024. The Renters’ Rights Act has further encouraged landlords to leave. First-time buyers have also been squeezed by higher borrowing costs and the closure of the Help to Buy equity loan scheme in 2023.

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