Monday 3rd February 2025 marked the start of ‘New Homes Week’ – seven days dedicated entirely to the new build sector. This year, the theme of the event revolved around ‘community’ and focused on the benefits of new build homes and how these developments can enhance local areas.
New-build properties have long been an attractive proposition among all types of borrowers, whether they are a first-time buyer (FTB), have a growing family or are in their later years and seeking a low maintenance home for their retirement.
New-build properties are often associated with Government incentives such as Help to Buy and Shared Ownership, making them an attractive and affordable option, particularly for FTBs.
These schemes can provide lower deposit requirements and longer lead times, offering greater flexibility during the homebuying process.
Similarly, the modern design, high energy efficiency, and ability to customise certain features make new builds an attractive option for borrowers seeking lower energy costs and a move-in-ready home.
One of the many other benefits of the new-build sector is that the creation of new homes helps to address the housing shortage in the UK. According to research from the Office for National Statistics (ONS) and consultancy firm Bidwells, England has a shortage of 2.5 million homes and needs to build 550,000 new homes each year until 2031 to address the problem.
While these figures surpass the Government’s house-building target of 1.5 million in England by 2029, Deputy Prime Minister Angela Rayner’s recent announcement reaffirming the Government’s commitment to the creation of new homes, suggests the new-build sector is likely to remain buoyant over the next few years.
Investing in the market
As a lender actively involved in the new-build space, we remain committed to developing and enhancing our product offerings to ensure the needs of those buying a new build property continue to be met. This includes investing in a new mortgage origination platform that helps to speed up the mortgage application process.
One of the many challenges in the new-build sector is the unforeseen delays that can sometimes occur during the building process. This can often push back moving-in dates and may also have an impact on mortgage offers.
Therefore, the ability to quickly process applications and secure a swift speed to offer can prove greatly beneficial for both the developer and the buyer and provide greater reassurance regarding the purchase, particularly given the long delay between exchange and completion.
The new mortgage origination platform allows valuations to be instructed as soon as a mortgage application is received. This, coupled with the case tracking functionality, means brokers and their clients can use the time before the valuation is returned to gather all the documentation required to complete an application.
This can help to save time during the application process and ensure the mortgage is processed swiftly and smoothly. It can also prove extremely beneficial when dealing with new-build developers given the timescales involved in purchasing a new build, where speed and efficiency are often of the essence.
In addition, we offer a range of new-build mortgage products up to 95% loan-to-value (LTV), for those buying directly from a developer as well as through the Shared Ownership scheme. New-build flats as well as houses are accepted as standard, and we’ll also consider applications from borrowers benefiting from builder incentives.
With addressing the housing shortage remaining a key Government priority in the years ahead, the new-build sector is likely to experience increased demand from homebuyers looking to capitalise on opportunities, incentives and initiatives as they arise.
For brokers with clients looking to purchase a new-build home, working with a specialist lender can open up a wider array of mortgage offerings designed to maximise borrowing, improve affordability and streamline the application process, all of which can help your client achieve their homeownership goals.
Ashley Pearson is head of intermediaries at Loughborough Building Society
