I started buying homes in the early 1990s – during that recession. There was one thing at that time I would steer clear of –new build. Like many, I had a poor impression of the way they were built and much preferred properties with character that, at the time, I could do up and make money from.
However, my view on new builds changed dramatically when I started working in Part Exchange and visiting lots of developments in the early 2000s. I was pleasantly surprised by the quality of the build themselves and was also impressed with the brownfield conversions of old hospitals or country houses and that the old ‘boxes’ and community layouts had completely changed, helping to make new build communities much nicer, better thought through places to live.
EMBRACE THE SCHEMES
I think it’s vital that agents embrace, where they are being built, the new build market. I am continually surprised at the lack of understanding that potential and existing first time buyers have of how schemes such as Help to Buy work and especially in more expensive areas, Shared Ownership. This is a scheme where many still think they have to ‘share’ with other people as opposed to ‘share’ the financial commitment – and burden – of owning a home.
Although builders are building fewer homes, they are building more houses… which is a very good thing.
And, whoever is in government, we are hoping that they will get to build the million homes both major parties commit to, although the Conservatives so far are offering to build 225,000 affordable homes, whereas Labour plan to build 500,000 of the million as affordable.
New build though still needs to be ‘sold’ to people, as not all have had the ‘revelation’ I have and appreciate the care that goes into new build these days.
The advantages, in particular for our ‘ageing’ population, who we are desperate to ‘tempt’ out of their current homes into something brand spanking new that has lower heating costs and also the advantage of little maintenance required, something that the retirement builder McCarthy and Stone recognises is a ‘hidden’ fear of those living in their existing homes and why they would consider moving somewhere different and new.
One of the strongest messages for potential new build buyers to know is that recent analysis from the HBF shows that they are building bigger homes, not smaller ones. For example, the report showed that the number of bedrooms built increased from 385,000 in 2008/9 to 478,000 in 2015/16. And another interesting stat from this report is that although they are still building less homes than prior to 2006/7, they are building more houses, which is a good thing due to the number of families keen to get on the ladder.
Recent reports of the influence of Bank of Mum and Dad and the ‘unfairness’ for those that don’t have access to those funds also points towards new build being a great option now to get the first rung on the ladder. Those that don’t have access to the ‘UK’s 9th biggest lender’ do have access to schemes such as Shared Ownership and it can easily be argued that the Help to Buy Scheme plugs the gap in this funding for those who don’t have parents already on the ladder.
In addition, apart from accessing a quality product, potentially through a discounted scheme, first time buyers have a better chance of saving for their next home as money doesn’t have to be spent on high heating bills due the energy efficiency of new builds, nor do they have to spend their cash on maintaining a property, meaning saving to trade up to their next home is possible, particularly important if we are moving towards a slower period of capital growth.
NHBC UK statistics for Q1 2017
So how many more properties are being built by developers to potentially cash in on?
- In Q1 2017 the number of registrations was 42,470, a 17% increase on last year (36,351). Of these:
- Private sector registrations in 2017 increased by 10% (31,197), compared with the same period in 2016 (28,278).
- Affordable sector registrations in 2017 increased by 40% (11,273) when compared to 2016 (8,073).