Remarkably, we have seen demand for new build mortgages exceeding everything that has ever been seen previously. Pete Carter, head of the Just Mortgages new build division, has worked in new build mortgages for over twenty years and believes that he has never seen it so busy – particularly as it was in the middle of the peak holiday season.
There are a number of reasons for this, but overall it is a cause for great optimism. Demand for new build housing has been rising for some time. It has been well publicised since the government’s new build part of the Help to Buy scheme was introduced. There have also been incentives for house builders to build more new housing and much publicity of new housing when it happens, while many house builders will also offer incentives such as help with stamp duty or cash back on completion.
It is also a fact that many people just getting on the housing ladder also prefer new build homes as they know that there is little they need to do to them. In fact the majority of new builds are now bought off plan.
The reason the rise in this sector gives me great hope is because, despite a number of doom and gloom stories, I believe that there is still great demand for housing and the economy is still in a very strong position. There has been only a very small dip in mortgage volumes across the board compared to this time last year, and much of that appears to be down to people pausing for breath over the summer, to see what the impact of the vote will be. There is therefore much reason to believe that mortgage demand will pick up quite strongly in the autumn and return to levels similar to those seen last year.
Interest rates are at an all-time low, and the slight softening of house prices, where they have occurred, is well overdue and just makes it easier for first-time buyers to get on the housing ladder. I think great optimism can be taken from the incredible demand for new build mortgages. What we need now is to talk up our market rather than talking it down, and let this optimism seep back through the UK, as it’s consumer and business confidence that will have the biggest effect on how well the British economy does over the next 12 months.