As the housing market continues to evolve, new build properties offer both opportunities and challenges for mortgage intermediaries, especially in supporting first-time buyers (FTBs) and addressing the rising demand for affordable housing.
FTBs remain a crucial part of a healthy housing market; without them, the market can stagnate, making homeownership more difficult for everyone. However, with rising property prices and affordability pressures, many FTBs are struggling to get onto the property ladder.
Supporting FTBs often involves exploring a range of solutions. While shared ownership and Help to Buy schemes have been valuable tools in the past, new approaches are needed. It’s also crucial for intermediaries to consider how to incorporate various types of financial support from family members.
Affordable housing: The need for increased supply
The demand for affordable housing continues to grow, compounded by the limited supply of new homes. A key challenge lies in the delivery of Section 106 housing stock, where developers are required to allocate a portion of their developments to affordable housing. Recently, additional challenges have arisen that hinder housing associations’ ability to acquire this stock, which has impacted the overall supply of affordable homes.
For intermediaries, staying informed about how local authorities and housing associations are collaborating with developers to increase the availability of affordable housing is crucial. As the government pushes for greater homeownership opportunities, buyers must be aware of shared ownership options and other affordable housing schemes.
Energy efficiency and the Future Homes Standard
As the UK works toward its goal of achieving net-zero carbon emissions, energy efficiency in new build homes is becoming hugely apparent. The Future Homes Standard, set for implementation in 2025, will require all new homes to incorporate low-carbon heating systems and meet high energy efficiency standards. This shift presents both challenges and opportunities for the market.
On one hand, new build homes that meet or exceed these standards will likely attract buyers seeking energy-efficient, future-proof properties. On the other hand, the initial cost of these homes may be higher, potentially affecting affordability for some buyers. Understanding how energy efficiency factors into property valuations and mortgage lending will be crucial in advising clients effectively.
Innovation in the New Build Mortgage Market
Looking ahead to 2025, driven by the Future Homes Standard and ongoing affordability challenges, innovation in the mortgage market is expected to increase. Paving the way for products designed to make homeownership more accessible, particularly for FTBs. Innovation will also come in the form of streamlining the mortgage process and reducing friction for buyers.
In response to direct intermediary feedback, we’ve introduced a specialist New Build Support Team. This team offers valuable assistance throughout the entire application process, from pre-submission guidance to post-offer support, helping intermediaries provide a higher level of service to their clients and helping them to navigate an often complex but opportunity-laden new build sector.
Matt Aston
Head of New Build
Barclays
