The importance of delivering the right new builds

New build demand is there. Property investors just need to harness it. According to a survey from the Mortgage Advice Bureau, nearly half (48%) of homebuyers expressed a desire to purchase a new build in 2024. A 21% increase on both 2022 and 2023.

This desire is spread across demographics and borrower types too. Around 34% of those wanting to buy a new build in 2024 were those who currently owned a property, but were looking to move home. This could potentially be due to part-exchange opportunities. This was closely followed by first time buyers (33%).

On first time buyers, youngsters haven’t lost hope either. A third of Gen Z savers are planning to buy a property over the next three years, according to analysis from Lenvi.

What’s frustratingly apparent however, is that the market is not delivering the types of new-builds that people actually want to buy. New build sales have tanked. Every year since at least 2021, new build sales as a proportion of all property transactions in the UK have fallen. In 2024, just 10% of total purchases were for new builds.

There are likely many reasons for this. We’re generally not building enough new builds to keep up with demand, which may add to the lack of sales. Houses, also, are still far too expensive for many. but what may have the biggest impact in the current market is simply a lack of aesthetic appeal.

Many are deemed ugly or soulless and while this is clearly a subjective issue, dealing with “snags” isn’t. On top of being bland in the eyes of the average buyer, many new builds are plagued with problems. Last year, the Competitions and Markets Authority reported that a growing number of new build homeowners were reporting a higher number of defects.

Fortunately, these drawbacks can be reversed, and amended by property investors themselves. Homeowners are desperate for higher quality stock, and investors who can deliver that are likely to be greatly rewarded for their efforts.

The specialist lending market is primed to help brokers and their borrowers/investors here. If a new build developer requires a bit more time to finalise their plans and get their properties perfect for a first-time buyer, development exit funding including Bridging and Bridge Fusion can provide that breathing space. Or, if a new build needs a bit of a makeover to boost its aesthetic appeal, tailored refurbishment finance is available, whether it’s being used for residential or buy-to-let purposes.

We need more new builds. We just need the right new builds. Property investors who realise that ahead of their competition will gain a crucial edge.

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