"Over the past decade, the share of new homes sold before construction is complete has fallen by around a third. This partly reflects the loss of buy-to-let investors from the market, who have traditionally been the largest buyers of off-plan homes"
- David Fell - Hamptons
Off-plan property sales in England and Wales have fallen to their lowest level since 2013, with just 33% of new homes sold before construction was complete in 2025. The figure, drawn from Hamptons' annual off-plan sales index using Connells Group new homes data and Land Registry completions, marks a fall from 36% in 2024 and is well below the 2016 peak of 49%.
The decline has deep roots in buy-to-let. The 2016 peak coincided with the introduction of the second home stamp duty surcharge, a policy change that significantly reduced demand from buy-to-let investors, particularly in southern markets.
Because investors have traditionally dominated off-plan purchases, their withdrawal has had an outsized effect on housebuilders' ability to secure early sales. The increase in that surcharge from 3% to 5% at the end of 2024 compounded the problem, further dampening investor appetite south of the Midlands.
Between 2016 and 2025, London (-21%), the South West (-21%), and the South East (-20%) recorded the sharpest percentage-point falls in off-plan sales. The regional picture is more varied than the headline number suggests, however.
In the North West, 69% of flats were sold off-plan in 2025, the highest share of any region in England and Wales, driven by sustained investor demand. London was close behind at 65%.
At a local level, 94% of new flats sold in Oldham last year were purchased before completion, followed by Wolverhampton at 86% and Salford at 81%.
Flats remain far more likely than any other property type to be sold off-plan, reflecting their continued appeal to investors and first-time buyers who face fewer constraints around timing and housing chains. In 2025, 55% of flats in England and Wales were sold before construction finished.
By contrast, 40% of terraced homes, 29% of semis, and just 21% of detached houses were sold pre-completion. Yorkshire and the Humber recorded the highest share of houses sold off-plan at 29%, while London was the only region where fewer than one in five houses were sold before being built, at 15%.
Despite this, flats have driven much of the overall decline. Not only did they record the biggest fall in off-plan share across all property types in 2025, but housebuilders have increasingly pulled back from flat development altogether.
Flats accounted for a record 54% of new homes sold in 2007, a proportion that fell to 38% by 2016 and to just 22% by 2025. As a result, flats now represent only 38% of all off-plan sales, down from 55% in 2016. The last year in which flats made up at least half of all off-plan sales was 2017.
The financial consequences for developers have been significant. With fewer homes selling before completion, builders carry development finance for longer, and in a higher interest rate environment that has become increasingly costly.
Housebuilders in England and Wales incurred an estimated £264.5m in additional financing costs in 2025 compared with a decade ago, equivalent to £3,125 per new home sold, up from £2,934 in 2024.
Around half of that increase reflects the impact of higher interest rates alone, adding roughly £1,800 per home. The end of the Help to Buy Equity Loan scheme in 2023 has added further pressure, lengthening the time it takes to shift completed stock.
"The share of new homes sold off-plan continued to slide last year," said David Fell, lead analyst at Hamptons.
"Over the past decade, the share of new homes sold before construction is complete has fallen by around a third. This partly reflects the loss of buy-to-let investors from the market, who have traditionally been the largest buyers of off-plan homes."
"However, the shift away from building flats towards houses, which are more likely to be sold after they're finished and ready to move into, has increasingly contributed to the downward trend."
The strategic implications extend beyond the balance sheet. "This move towards lower-density, house-led development is likely to make it harder for the government to significantly ramp up housing delivery," Fell added.
"Housebuilders are increasingly focused on protecting margins, which has favoured faster-selling suburban schemes. By contrast, profits on slower-selling, high-density sites have been eroded, or in some cases, wiped out entirely by rising finance costs."
For landlords and property investors still active in the new-build market, the dynamics of off-plan purchasing remain compelling in theory, even if the policy environment has made participation more costly. "In a higher inflation, higher interest rate world, off-plan sales have rarely been more valuable," Fell noted.
"The cash they generate allows housebuilders to pay down expensive development finance earlier and help offset the substantial upfront costs of materials and labour. Many of the materials needed to build new homes are highly energy-intensive, meaning their costs have risen far faster than wider inflation."
