New builds are attractive to a wide and diverse selection of buyers. They can be the right choice for the younger generation buying their first home, later life buyers ‘right-sizing’ as part of planning their future and even landlords looking to grow their portfolio with attractive and up to date property stock.
Latest figures from the Ministry of Housing, Communities and Local Government covering the period April – June 2019, show that completions were estimated at 45,190 (seasonally adjusted), a 4 per cent increase from the previous quarter and 11 per cent higher than a year ago.
But with first time buyers still struggling to save the necessary deposit, lenders are putting into focus how best to help this important sector of the mortgage market. High LTVs and innovative criteria have helped to keep transactions high and 2020 will probably see more demand for brand new homes.
The Help to Buy scheme has assisted this market in recent years, so it will be interesting to see what new initiatives the government introduce specifically for such an important property type as new builds.
The aim is to find more ways of enabling more intermediaries to help their clients who are looking to get on the housing ladder and on the move in an achievable and sustainable way.
Specific national initiatives, new lender products and bespoke criteria for new builds will help to increase transaction numbers for intermediaries in the housing market and deliver the reality of owning a new home to their customers.
There are other attractive benefits when considering a new build house.
There isn’t a chain above the customer when buying the house so there is also less risk of the house falling through due to gazumping as new houses are usually taken off the market when it’s reserved, giving more certainty for the whole house buying transaction.
New houses and flats are built with the latest insulation and eco-friendly techniques to keep the house energy-efficient, which could result in lower heating costs. They also come with a structural warranty from organisations like the National House Building Council (NHBC), giving some comfort if there are any build issues in the early years.
Safety and security are catered for as they usually come with smoke alarms and security systems fitted as standard to protect the house.
All of this means that there is little chance of a poor survey as everything is brand new, and that means no repair or renovation work, which can help the mortgage application go through more smoothly.
With the market for new builds in 2020 still being formed, a few home truths remain – there will always be demand for new builds and lenders will continue to provide for them in their product propositions. This is good news for intermediaries who will continue to be well served by lenders with specific products and criteria to help develop business in this sector of the mortgage market.
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