However, the new build sector is not without its faults. Higher prices and retrospective legislation have caused issues for new and existing purchasers, meaning these properties cannot always be presented as a solution to the housing crisis.
So this week, Mortgage Solutions is asking: Are there too many barriers in the new build market to sufficiently support property demand going forward?
Even without a slowdown in homeowners moving, there is a pressing need for more housing, including affordable housing, so fewer barriers to new builds is welcome.
Developers can only work within the regulations at the time. This is true of planning applications as well as material issues such as cladding.
I do think it really falls to the government to get the balance right to ensure that we build in a responsible way. We also need better protection for homeowners when things go wrong.
It can’t be right that people are effectively hostages in a home they purchased and now cannot sell due to cladding.
Holistic reformation is necessary to ensure that not only are we building new properties, but they are serving our communities and environment in the best possible way. We need investment in infrastructure – roads, schools, services. It is about balance and we haven’t achieved it yet.
Unfortunately, this means that many projects are blocked at a local level. The gap between national policy and what takes place on the ground needs to be addressed.
It is a market that requires heavy regulation but that should not translate to “barriers”. That way new builds can support property demand going forward.
With the overall housing shortage in the UK, it is inevitable that new build properties will take up some of the demand. New builds however, are not without issues.
Whilst there are some high-quality developers taking pride in the homes that they build, the UK has a poor reputation when it comes to new builds. There are too many substandard homes, with poor materials, tiny rooms and real problems with post-moving in aftercare.
The cladding scandal has also shown how homebuyers can be left vulnerable and out of pocket when things go wrong, with developers and the government doing little to help those affected.
Lenders can also be more risk averse when it comes to new builds, with many properties dipping in value once occupied, meaning lower loan-to-value products being offered, pricing some out of the market as they struggle to save for a deposit. This can be a bigger issue when it comes to flats as they are often seen as higher risk.
We all agree that more homes need to be built, particularly affordable homes, and this is where the government should step in and reform the market.
Land banking should be stopped and the building application process should be speeded up. Local council building targets should be introduced to prevent nimbyism but house building should be looked alongside infrastructure investment, such as roads, schools and GP surgeries.
Too many estates are being built where the local amenities cannot cope with the sudden influx of people.
New-build homeowners should also have more rights when things go wrong, we hear far too many horror stories of consumers battling to get the basics fixed.
We are seeing a lack of supply in the market so there are fewer properties.
I deal with a lot of mortgages in the Sheffield market, and it’s been one of the strongest performing over the last few years. I’ve had clients waiting up to a year or 18 months to get an offer accepted because demand is that high.
I do think the new-build market will play a part in filling that gap.
Some clients are adamant they want an older property, but for others they will have to turn their attention to a new-build property at some point because their bids aren’t being accepted.
One of the big issues will be price. For a lot of first-time buyers, they are told the properties are targeted to them but it’s probably better suited to second or third-time buyers who are more established in their careers and have more money.
Also, my clients are more aware of leasehold issues which have arisen in the last couple of years. If they do see these properties come up, they tend to turn away from them because of the headlines. That is a potential barrier.
Those two issues are the big ones.
The other thing I’ve found is clients are required to use specific brokers and solicitors. I believe clients should get independent advice from somebody not connected to a development.
If some of them had done that, they would not have experienced the leasehold problems they’ve been seeing down the line because the clauses of the contract aren’t always fully explained.