Lots of data exists about just how much is required and how short we are of reaching sustainable housing levels. Back in September 2015 the government set a target of one million new homes in England by 2020.
In the Autumn Statement Chancellor George Osborne warned that there was a “growing crisis of home ownership in our country”. In a bid to bridge this gap he unveiled plans to boost housebuilding. He plans to offer £2bn of public funds a year to fund the construction of 400,000 affordable homes by the end of the decade, release public land suitable for 160,000 homes and introduce a new London Help to Buy scheme for first-time buyers struggling to afford a property.
There are no quick fixes to the obvious supply issues, and it’s fair to say that the new-build sector still has a long way to go in fulfilling its obvious potential. However, the good news is that there are increasing signs of it generating a greater number of opportunities for prospective buyers and intermediaries alike. In fact, research from Barclays reveals new builds are the nation’s favourite property type, with over a third of people choosing this style as their preference.
New build remains a specialist marketplace which inevitably brings with it a more stringent risk to reward strategy for lenders, meaning that rates do still carry a slight premium. Having said this, that gap is closing and some great deals are currently available through intermediary channels to help meet the obvious growing demand.
The importance of the intermediary market has long been evident within this particular sector. The usual requirement of a deposit/reservation fee being paid to the developer in order to secure the property means that buyers are tied into the purchase at an early stage. A good, professional intermediary will not only ensure that a mortgage is obtained quickly to help borrowers get ahead of any potential competition, but also provide an additional layer of reassurance moving forward.
For intermediaries looking to generate more business within the new-build marketplace there are still some fundamentals to take into account. Like many of the more specialist areas, lenders operating within this space will have their own individual quirks and criteria requirements. This may be in the form of deposit levels for different property types or in the length of time regarding the mortgage offer and timeframes for the property to be completed. Extension options will be available through most lenders but again each may operate slightly differently on a case-by-case basis.
Getting to grips with different propositions and forging strong lines of communication with relevant lenders will inevitably make it easier to find the right deals for your clients. And with more innovation, government initiatives and incentives being offered, 2016 could – and possibly should – be the year when the new build sector begins to really blossom.