By Fresh market analysis looks at just why homebuyers are flocking to new-build homes and thus creating a sector that is sustaining the British housing market during this wildly uncertain time.
Despite the incredibly turbulent times currently being endured by the UK economy, house prices are managing to stand strong in an environment when one would expect property values to fall under the pressure of dropping buyer demand.
And while the entire housing market is performing well, it’s clear that the majority of its resistance is coming from the new-build sector.
Recent government data revealed that the value of existing homes in Britain grew by 6% in the last year while at the same time, the value of new-build homes increased by 23%, meaning new-builds outperformed older properties by 17%.
As a result, the average price for a British new-build home is now £412,051.
This significant disparity in price growth is the result of strong demand for new-builds.
But what exactly is drawing buyers to the world of new-builds?
Why buyers are opting for new-builds, according to analysis by Unlatch, the new homes sales progression and aftercare platform for developers and housebuilders.
Choice
Since the pandemic, the British housing market has been on fire.
Demand is so high that any decent family home that comes to market is snapped up in a heartbeat, often selling for more than the asking price.
This means that buyers with fixed budgets are missing out time and time again which is leading many to buy homes that fall well short of their original aspirations.
With new-builds, however, there is much more choice and availability.
Buyers are able to register early with in-progress developments and thus be given genuine freedom of choice over the size, style, and decor of their home, especially if they’re buying off-plan.
Chain-free certainty
When buying an existing home, it’s likely that buyers will get caught in a chain.
Chains cause delays and delays invariably cost money.
Delays also cause issues with mortgage arrangements, perhaps even forcing them to expire.
At a time when mortgage rates are set to increase, the last thing buyers want to do is lose one offer and have to accept a more expensive one.
New-builds are free of the chain because there is no existing owner and you’re buying directly from the builder.
This is a big reason for their growing popularity, especially among first-time buyers.
Being chain-free brings certainty to the buying process at a time when certainty is in very short supply.
This is proving invaluable.
However it is worth noting that with the potential hardening of the market looming, many developers may now look upon those selling in order to buy more fondly (through gritted teeth perhaps) to ensure the momentum continues.
Warranty and no initial repair costs
Older properties often require additional money to be spent on top of the purchase price.
Whether it’s repairs or renovating run-down interiors, buyers usually end up wanting to make improvements.
But with the cost of living crisis and rising mortgage rates, spare cash is hard to come by.
New-builds require no initial repair costs because everything is brand new.
And even if problems are found, commonly known as ‘snags’, new-builds come with extensive developer warranties which means buyers don’t have to spend a penny to make imperfections perfect.
Rules and regulations
New-build developers are obliged to adhere to strict rules and regulations when building a home.
These high standards are not required from those selling existing homes which means buyers have to spend more time and money on the due diligence required to ensure a property is structurally sound.
Lower household bills
New-builds are constructed with maximum energy efficiency.
This means they’re cheaper to heat and run.
With energy prices rising at a terrifying pace, it’s little wonder that buyers are choosing new-builds over older properties.
Incentives for first-timers
The pandemic-inspired value boom in Britain’s market has left many first-time buyers priced out of ownership – they’re simply unable to compete with wealthier buyers who have capital on hand from selling their current home.
New-builds, however, often come with government-backed incentives, such as Help To Buy, which make buying more affordable.
This provides a more accessible route to home ownership that many buyers are taking full advantage of.
Greater acceptance of technology
The traditional housing market has been reluctant to embrace PropTech.
This means the buying process remains old fashioned and, therefore, slow.
New-build developers, on the other hand, have been quick to embrace technology that helps streamline the buying process which dramatically slashes the time it takes for buyers to get the keys and move into their new home.
Unlatch is the perfect example of such technology. Working with 470 developers across the UK and Europe, Unlatch has facilitated the sale of more than £57bn worth of property across more that 3,400 developments since its conception in 2018.
It’s a platform that has already enabled developers to better serve more than 100,000 buyers and counting, getting them into their new homes quickly and efficiently.
Lee Martin, Head of UK for Unlatch says:
“The new-build sector is a shining light in the British housing market.
It’s providing great homes for people who need them and the numerous benefits of buying new are proving immensely attractive to buyers, especially at a time when money and time are increasingly tight.
These benefits start from the moment a buyer registers their interest and continue throughout their time in the home and much of this is due to the developers’ willingness to embrace technology such as Unlatch.
Rather than solving one small inefficiency and relying on other solutions to pick up the rest of the slack, as is the case with so much of the PropTech ecosystem, we’ve looked to create a platform that brings genuine benefit to buyers and developers and solves the problems they face when tackling an otherwise archaic, lethargic property purchasing process.”
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