The share of new-build homes being sold before they are completed dropped to a 12-year low in 2025, according to Hamptons. 

Thirty-three per cent of new homes in England and Wales were sold before construction was finished last year, down from 36 per cent in 2024. 

Fewer off-plan sales, combined with higher interest rates, meant housebuilders in England and Wales incurred an estimated £264.5million in additional financing costs last year, Hamptons said.

This equated to an additional £3,125 per new home sold, up from £2,934 in 2024. 

Hamptons said around half of this increase reflected higher interest rates, adding approximately £1,800 per home last year. 

The share of new homes sold off-plan in England and Wales peaked in 2016 at 49 per cent.  

This was when investors rushed to beat the 3 per cent stamp duty second home surcharge which came into force in April 2016.

Since then, landlords have made up a progressively smaller share of purchasers and the share of new homes sold off-plan has fallen in all but one year since.

As a result, last year saw the lowest share of new homes sold off-plan since 2013, Hamptons said.    

When buyers purchase a new build pre-completion, this is known as buying off-plan, with buyers choosing their home based on an architect's plans or a show home, rather than the real thing.

In the past, landlords made a large proportion of these purchases, but with tax and legal changes resulting in fewer buy-to-let purchases, off-plan completions are dwindling.  

Labour has vowed to build 1.5million new-build homes across England by 2029, equating to more than 300,000 a year. 

In October 2025, the Home Builders Federation wrote to the Office for Responsibility stating that unless the Government does something to boost affordability for first-time buyers and cut taxes, the ambitious housebuilding target will be missed.

Where are off-plan sales falling? 

Southern regions recorded the sharpest drop in off-plan sales over the past decade, while northern regions have fared better. 

Between 2016 and 2025, London, the South West and the South East of England recorded the sharpest percentage point fall in off-plan sales, at -21 per cent, -21 per cent and -20 per cent respectively.  

Hamptons said flats were driving the decline in off-plan sales. 

Although every type of new home saw a smaller share sold off-plan last year than in both 2024 and 2016, flats recorded the biggest flats. 

Flats comprised 22 per cent of new homes sold in 2025, down from 38 per cent in 2016 and 54 per cent in 2007. 

Hamptons said these declines had been 'exacerbated' by the increase in the second home stamp duty surcharge from 3 per cent to 5 per cent at the end of 2024, which further dampened demand from southern investors.

Last year, 55  of flats in England & Wales were sold before construction was completed.

The highest shares were recorded in the North West, where 69 per cent of flats were sold off-plan, driven by 'strong and sustained investor appetite'. 

This was a higher share than any other region, including London, where 65 per cent of flats were sold off-plan last year, Hamptons said.

At a local level, 94 per cent of new flats sold in Oldham last year were bought before completion, the highest share of any local authority in England and Wales.

Wolverhampton and Salford also recorded particularly high levels of off-plan flat sales.

According to the research, housebuilders have been scaling back flat developments. 

They accounted for 54 per cent of new homes sold in 2007. But this fell to 38 per cent by 2016 and 22 per cent in 2025. 

In 2025, 40 per cent of terraced homes, 29 per cent of semi-detached properties and 21 per cent of detached homes were sold off-plan before being built in England and Wales, according to the findings. 

Last year, Yorkshire and the Humber recorded the highest share of houses sold off-plan, at 29 per cent, while London was the only region where fewer than one in five houses were sold off-plan.  

David Fell, lead analyst at Hamptons, said: 'The share of new homes sold off-plan continued to slide last year. 

'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.'

He added: 'This move towards lower-density, house-led development is likely to make it harder for the government to significantly ramp up housing delivery.

'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.'

Neil Jefferson, chief executive at the Home Builders Federation, said: 'As affordability pressures intensify on the demand side, and rising taxes, levies and policy costs tighten conditions on the supply side, home builders are being caught in a perfect storm of weaker demand, slower delivery and growing pressure on housing supply.

'The evidence shows that a well-designed, targeted equity loan scheme can support buyers, unlock delivery and generate returns for taxpayers, yet for the first time in decades there is no meaningful support in place for first-time buyers.'