New build properties play a crucial role in easing the pressure on existing housing stock and remain attractive to a wide range of buyers, including first-time buyers (FTBS), growing families, and those looking to downsize.
However, data from the National House Building Council highlighted an ongoing imbalance between housing supply and demand, revealing that only 133,213 new homes were completed in the UK in 2023, a 12% drop from 2022.
Despite some encouraging new government targets aimed at increasing these numbers, it’s evident that a diverse range of solutions is needed to strengthen the new home sector.
To help address this shortfall and support buyers, lenders are introducing innovative product offerings tailored specifically for new builds, particularly in the higher 95% loan-to-value (LTV) range. This is especially beneficial for first-time buyers and those purchasing through shared ownership schemes, where owning a portion of the property makes homeownership more affordable.
In addition to higher LTV products, many property developers are offering incentives to entice buyers. These incentives might include financial contributions toward mortgage costs, free household appliances, or additional perks like carpeting and tiling. Lenders who work closely with developers often accept these incentives, provided the buyer also puts down their own 5% deposit, and all incentives are disclosed upfront to the surveyor.
Another valuable solution for those purchasing new build properties is Joint Borrower Sole Proprietor (JBSP) mortgages. These mortgages allow up to four family members to contribute their income to boost the borrowing capacity of the primary buyer, without all of them needing to be on the title deeds. This option is ideal for parents or relatives looking to help younger family members get onto the property ladder. JBSP mortgages are available on new build flats up to 100% LTV – where there is a charge included on the parents main property – offering a significant boost to buyers who might otherwise struggle to secure a mortgage.
Similarly, the Discounted Market Value scheme offers a low-cost homeownership option for buyers who qualify. Under this scheme, local councils and developers collaborate to offer new build properties at a discount of up to 30%, supporting local residents, workers, or people in specific occupations. This initiative not only helps first-time buyers but also ensures that local communities benefit from new housing developments.
As the market for new builds continues to evolve, the array of mortgage options available, including shared ownership, 95% LTV products, JBSP, and discounted schemes, helps to meet the diverse needs of buyers. For the UK to meet its housing targets, prioritising new home construction is essential. In doing so, buyers will have access to a range of solutions tailored to their circumstances, making homeownership more accessible and achievable.
If you have clients who are evaluating their new build options, why not speak to us 01509 610707 to help open more doors at a price and repayment terms clients can comfortably manage.
