Already, the new build market is showing signs of growth.
Latest figures from the Department of Communities and Local Government (DCLG) show that in the first quarter of 2017 new build starts reached 162,880 – up 15% compared to the same period last year. Likewise, completions over the same period totalled 147,960, an increase of 6% year-on-year.
However, while any growth is a step in the right direction, we still have a long way to go.
Crucially, to meet demand and ensure growth within the new build market, there needs to be greater competition.
Currently around 60% of new houses in the UK are built by just 10 companies, who are already building close to capacity.
Since the publication of the Housing White Paper, the government has acted to implement measures to encourage more SME builders and local authorities to construct homes. On top of the £3bn Home Building Fund, Sajid Javid announced a £2.3bn infrastructure fund to help deliver 100,000 homes in areas of high demand.
A lack of innovation within the house building process has also been stunting growth – the UK uses outdated house building techniques that have been in place for decades.
Legal and General has taken steps to improve the situation – our modular homes factory uses modern techniques that effectively reduce the amount of time spent on-site by up to 70% and can ultimately deliver up to 7,500 units per year.
Innovation is key to meeting the needs of the market and eventually transforming the whole industry.
Improving the number of new homes being built and the way they are constructed is just part of the story, however, it is incredibly important that we focus on the different types of tenures we are building as well.
We need to be building a healthy mix of private rental homes, homes for affordable and social rent, owner occupied and retirement homes.
The help to buy equity loan has the potential to be another bump in the road for the new build market.
As we seek to get confirmation about what is in store for the future of the scheme, brokers, lenders, customers and house builders all need clarity.
With about 35-40% of new build sales through the help-to buy scheme it is important for buyers, builders and lenders to know soon if the government is going to extend the scheme past 2021.
Shared Ownership is an interesting tenure that has grown in popularity in the past few years.
It is great to see that lenders are signing up to this scheme and that first-time buyers are taking advantage of this option.
What this tenure now needs is more lenders entering the market, encouraging competition and a wider range of choice for borrowers.
If lenders and housing associations work together to help soothe fears around this tenure, Shared Ownership could increase to around 30,000 new homes per year by 2020, from a current figure of around 10,000 a year.
So, the number of new build starts are on the up and there is increased competition from lenders, but there is still much work to do to innovate and revolutionise the new build sector.