New build properties are an increasingly popular choice in the UK, especially for first time-buyers (FTB’s). 17% of Skipton’s mortgage lending was on a new build home in 2023 and sixty six percent of these completions had a had a FTB on the mortgage.
New Build homes come with some distinct advantages for buyers and lenders alike… I’ve listed a couple below.
Ticking the sustainability box
The properties are often energy efficient, complying with the latest building standards and contributing to a more sustainable housing market. This helps reduce the homeowners carbon footprint and ongoing utility costs as well as potentially improving the average blended EPC rating of a lenders back-book.
Efficient transactions
They offer a unique advantage when it comes to the buying process, particularly for FTB’s. FTB’s purchasing directly from a developer are not part of an existing property chain. This makes the transaction far simpler and more efficient than buying a second-hand home which can introduce delays, properties falling through or other complications. Additionally, many builders provide attractive schemes like part exchange or similar for buyers who already own a property, again removing the traditional hurdles associated with buying and selling houses. For Skipton, this provides a layer of confidence in the deal as the completion conversion percentage is higher than non-new build transactions.
These are just some of the reasons why Skipton support the new build sector.
When it comes to new-build, Skipton has competitive criteria such as offering 95% LTV as standard on new-build flats and houses, competitive rates and innovative mortgage products such as our track record proposition.
Track Record Policy Changes
- If eligible up to 100% LTV on new build houses and flats.
- Maximum mortgage term increased from 35 to 40 years.
- Now acceptable in conjunction with Shared Ownership.
- Relaxed rent to monthly mortgage payment criteria – After 1 year of helping renters into their homes we have made various improvements to the way we calculate affordability which should help more customers step up on to the property ladder. This means in some circumstances we will lend loans which have monthly payments up to 120% of the rent the customer is currently paying.
Call to action for advisers
With the new policy above, is it time to revisit Skipton’s Track Record proposition? I hear a lot that “it doesn’t work in my area” however, when you look at various regions across the UK there are pages of listed properties for sale within a 5 or 10 mile radius of rented accommodation on a like for like basis, for example same number of bedrooms, same type of property and the rent vs the mortgage payment to buy the house stacks up. Nationally the average max loan we offer on Track Record exceeds the average loan requested on it.
Why not have a look at what new build houses are for sale in your region and search for that same property profile on what is currently available to rent? You may just find a new business income stream.
To find out more about Skipton and how they can support your New Build clients visit New Build | Skipton Building Society for Intermediaries.
Jonathan Evans
National Accounts and New Build Lead
Skipton Building Society
