new build property

New-builds should be a top priority to push housing market forwards

Increasing the focus on new-builds in the housing industry is “essential” for the ongoing strength of the UK’s property sector, says financial services lead.

Housebuilders are struggling to build enough homes to meet demand in some parts of the country. Often, they report being held back by stricter regulatory compliance requirements, as well as materials and staff shortages in more recent times.

But the need for new-builds in particular in the country’s housing market is picking up pace, and it’s not just about basic stock levels. New-builds are going to be an increasingly vital part of the puzzle when it comes to improving the energy efficiency of the property sector as a whole.

According to comments from Craig Hall, director of LSL New Homes Financial Services, there are numerous reasons why the UK should be placing more onus on the creation of new-builds across the country.

Resolving shortages and combating ‘NIMBYs’

The housing crisis debate has been rumbling on for a number of years now. In 2017, the government set a tangible target for new homes – 300,000 to be created every year until the early 2020s. As yet, this target has not been met, although construction levels have increased.

Research from Sky News revealed that the number of dwellings in England grew by 8.4% over the past decade, while the population grew by 6.6%. This sounds like good news, but with pre-existing shortages along with huge local variations, there is still a gap to plug.

In the suburbs of Manchester and Birmingham, for example, the population is rising faster than the number of properties. The issue is the greatest in more built-up areas, while rural areas have managed to stay ahead of population rises in some places.

It also found that the population grew faster or at the same pace as the number of homes in 150 out of 309 local authorities, revealing the scope of the issue.

As new-builds tend to be of a higher quality than old stock, the places with the greatest shortages also have the lowest quality of housing stock.

But Nimbyism has also been an issue, points out Hall, who says that some local councils have created backlash against the targets because they don’t want new residential buildings in their constituencies.

Go green and reduce bills with new-builds

Environmental issues have been more at the forefront of the government’s agenda in recent years, as has it been a prominent topic among the general public. New-builds have long been recognised as a more eco-friendly option for those wanting to reduce their carbon footprint.

But now, with the soaring cost of living and energy bills, new-builds can address cost issues over the long-term, too, which is arguably even more important for the average household right now. New-build dwellers will save a lot of money in the long run compared with those living in old homes.

As Hall points out, energy bills are predicted to rise to more than £4,000 per year by April 2023. Therefore, he says: “Increasing the energy efficiency of the UK’s housing stock could provide individuals and families with much needed financial relief.”

New-builds can save an average £2,000 in energy bills per year, according to some reports, and this could be even more if energy bills go higher, which could make a huge difference to many households.

Lenders could up their game

Green mortgages are already a growing trend in the borrowing market at the moment, with more and more lenders offering incentivised products to those buying new-builds or particularly energy efficient homes.

Leeds Building Society, points out Hall, is one lender than has “improved its affordability assessment for new-build properties, allowing homebuyers to borrow more for an energy efficient new-build home than for a less energy efficient property.”

With interest rate rises continuing to push up mortgage rates and making borrowing more expensive, offering incentives for newer properties could be a truly effective way of encouraging the new-build market and buyers and allowing them to save money, too. Hall believes more lenders should follow suit.

He concludes: “Whilst increasing the focus on new-builds will not completely solve these issues, it will certainly go some way to addressing them and is important, if not essential, for the strength of the UK’s housing market moving forward.”

Self-certified Sophisticated Investor

Please read

I declare that I am a self-certified sophisticated investor for the purposes of the restriction on promotion of non-mainstream pooled investments. I understand that this means:

I am a self-certified sophisticated investor because at least one of the following applies:

I accept that the investments to which the promotions will relate may expose me to a significant risk of losing all of the money or other property invested. I am aware that it is open to me seek advice from someone who specialises in advising on non-mainstream pooled investments.

High Net Worth Investor

Please read

I make this statement so that I can receive promotional communications which are exempt from the restriction on promotion of non-mainstream pooled investments. The exemption relates to certified high net worth investors and I declare that I qualify as such because at least one of the following applies to me:

aerial-view-uk-houses

STAY AHEAD OF THE MARKET

Sign-up for first access to new developments and exclusive property investment opportunities.

We send limited and targeted emails on new launches and exclusive deals which best fit your areas. We are trusted by over 30,000 active buyers as their source for new stock.

  • New property developments
  • Professional market reports
  • Property deal alerts
  • Development updates
UK holiday let

FIRST FOR NEWS AND KNOWLEDGE.

Receive trending news straight to your inbox and stay up to date on all of the property market trends and advice.

Established since 2005 we are a leading voice of authority and commentary on the UK property market. Our news is trusted by Apple News & Google News.

  • UK housing market
  • Mortgage & money
  • Buy-to-let landlords
  • Guides & advice

Talk to us

Speak to our UK property experts today:

 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

 

+852 6699 9008

Open from 9am-6pm HKT