Self Build, Custom Build And New Build Need All Our Support
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ISSUE THREE
2019
Brought to
you by
Self Build, Custom Build And New
Build Need All Our Support
Newcastle Intermediaries discuss how midway through the year, many
builders reported reasonably good results but the tone in which they
delivered them was more subdued. Several firms reported a drop in the
number of homes sold over the first half of the year, citing Brexit-related
uncertainty as a driver for slower customer demand.
Possible Speed Bumps
Ahead In The First Time
Buyer Market
With a new decade upon us,
Aldermore feels it’s the right time to
reflect back on the last ten years.
Modern Methods Of
Construction
Barclays discuss how the
construction industry is moving at
a rapid pace, turning to modern
methods of construction - modern,
but not always new.
Ten good reasons to choose
H&R for Intermediaries for Welcome Contents
your new build buyer client Welcome to the third edition of New Build News!
Following the success of the previous issues of New Build
News, we are thrilled to inform you that New Build News
Possible Speed Bumps
Ahead In The First Time
Buyer Market
04
is now a regular addition to our usual publications. So Aldermore
you can expect more knowledge and insights throughout
2020. We’ll continue to feature opinion and market Government Ambitions 06
analysis from our lender partners, developers, packagers For Shared Ownership –
and surveyors.
Do They Deliver What
We are continuing our focus on supporting you in all People Want?
things new build and in this latest issue, we have a look
Leeds Building Society
at the current market, how we may see it evolve and the
opportunity that comes with that evolution.
Modern Methods Of 08
I hope you find some food for thought in this edition of
New Build News. Enjoy!
Construction
Barclays
Best wishes
First Time Buyers And 10
Stacey Wood Help To Buy
National New Build and Surveying Vida Homeloans
Relationship Manager
Self Build, Custom Build 12
And New Build Need All
Our Support
Newcastle Intermediaries
The Future Of The 14
Home Ownership Dream
Santander for Intermediaries
Contact our new build Nationwide’s Guide 16
helpdesk for expert To New Build
support and knowledge Nationwide for Intermediaries
on all areas of the market.
0345 230 9000 Principality - Where New 16
Build Homes Matter
newbuilddesk@sbg.co.uk Principality Building Society
Call 01455 894093 to talk to us about your new build case
This publication is issued by PMS. PMS is a trading style of Premier Mortgage Service Limited a company registered in England and Wales with number 5011650. Registered
Tweet us to request a callback, including #BookH&R office: Pixham End, Dorking, Surrey RH4 1QA. This document is for use by financial advisers only and is not approved for use with customers. The views expressed in this
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NEWBUILDNEWS 03
* there must be a clear floor between the commercial unit and our security
Possible Speed Bumps Ahead In The First
Time Buyer Market
With a new decade upon us, it’s time to reflect back first time buyer mortgages in 2018, a sizable increase product, and already the product today compared to so crucial to growth, and will be even more so in the
on the last ten years. It is safe to say the mortgage from 6.8% in 20132. 2013 is sizeable. next decade. Having a human approach to get into
market feels unrecognisable to what we had in 2010. the detail of finances to understand each first time
We entered a new age of regulation, saw the rise of The growth in first time buyers finding new build In addition, the Bank of Mum and Dad has grown to buyer’s unique circumstance will help support this
challenger banks, and most importantly strong levels homes in the past five years has been substantial. But being a top ten lender, and with pension freedoms market in the long term.
of growth far away from the post-global financial crisis forward there may be some obstacles in the road. expanding and greater options for using housing
lull at the beginning of the decade. It is important to explore whether they are minor equity now available, this is likely to help the transition The industry has had no shortage of challenge over
speedbumps or cause a hard brake in the market. in aiding first time buyers raise deposits for homes. the past decade, and instead of being weathered by
When looking at the 2010s, the big achievement that it, we have instead proved resilient. The introduction
will stand out is the elevation of first time buyers to Help to Buy to end This generation of first time buyer of the Mortgage Market Review (MMR) and the
being a key driver of the market. In 2010, they were numerous further regulatory changes after that could
First and most obvious is the changes to Help to Finally, it is important to understand this generation
37% of all house purchase loans and in 2018 they are have dampened the industry, but instead we provide
Buy and its eventual withdrawal in 2023. The price of first time buyer. This is the most diverse generation
51%, with the upward trend continuing in 2019.1 more choice and better service now than we did five
cap in 2021 will have an effect but, looking at what in terms of circumstance ever and they demand
years ago. We can expect the same strength of spirit
Growing importance of new build to new buyers the average first time buyer is borrowing in the choice and options.
in the next decade.
different regions, the caps are relatively generous.
New Build is becoming an increasingly important For example, UK Finance data shows the average The average first time buyer is in their early-30s,
option for first time buyers and the introduction price bought in the South East is £296,880 but the which means many started their careers in the Sources:
of the Help to Buy schemes in support have been cap is 407,400 and in the East Midlands the average aftermath of the financial crisis. It is understandable
huge factors in this growth. Help to Buy might never price bought at is £185,175 but the cap is £261,900. many struggled to establish their careers, may have 1
UK Finance RL1 table – first time buyer historic volumes
have reached the numbers needed to be the centre However, there is a slight tightness in the caps next had gaps in employment, student debt, and credit 2
UK Finance S4 mortgage data tables – first time buyer volumes
piece of an election campaign, as perhaps George to the average in the North West and North East with issues in their past such as overdrafts, payday loans broken down by property type
Osbourne initially envisioned, but the scheme the difference just around £40-50,000. and some may even have CCJs. This generation
achieved what it set out to do. Namely, it helped also has more self-employed among them than
many first time buyers find a home and the statistics The end of Help to Buy may have more significant the previous generations and many with lumpy
show the success. impact but the extent of it will depend greatly on the income like nurses, teachers and taxi drivers. They
next 4 years lead in. The withdrawal of the Mortgage are also obsessed with technology so the modern,
The number of first time buyers taking out mortgages Guarantee scheme held very little detriment to technologically supportive options that New Build
on New Build properties stood at 68,500 in 2018, up the market due to lenders introducing alternative provides suit them very well.
12.1% on 2017 and eye-wateringly up 389% on 2013, products. This can be the same with the equity loan
the year the Help to Buy schemes were introduced. The one size fits all approach of old will not help many Steve Hewitt
New Build properties accounted for 19.2% of new of this generation get on the property ladder, and National Key Account Manager
this is why the growth of specialist lenders has been
04 NEWBUILDNEWS NEWBUILDNEWS 05
Government Ambitions For Shared
Ownership – Do They Deliver What
People Want?
The development of new homes is a pivotal part of Thames Valley’s ‘Shared Ownership Plus’ has basis, so affordable housing provision remains in a better position for mortgage finance availability,
the UK housing market. But as well as open market facilitated higher levels of staircasing vs. the market. areas where provision is most important in e.g. rural indicating the current lease is sufficient, subject to
properties, new build also creates affordable homes, What’s clear is that the market needs to remember areas where fewer new affordable properties typically fundamental clauses such as mortgagee protection
which are arguably needed more now than at any the tenure has a range of customers and continues to will be built or available. For other customers, if the being in place.
time since the scheme’s introduction. supports those who don’t wish to staircase while also landlord elects to not ‘buy back’, they can sell on the
offering solutions for those who do. open market and return appropriate funds to their The Government should be mindful of the danger
Affordable housing schemes come and go, but landlord. of stifling customer choice and new propositions
Shared Ownership has been here for 40 years – and Advisers can play a key role here, taking into account through wholesale lease changes. Instead, it could
with more focus than ever on this unique tenure it’s individual circumstances and helping buyers with Introducing a standard model for all providers consider adopting a code of best practice covering
not going anywhere. The question now isn’t “Does it property ambitions now, and throughout their home things such as arrears handling, property disputes,
work?” but “How can we make it more successful?”, ownership life. Shared Ownership, where it’s supported by grant etc. that no provider should have an issue with. This
and it’s a question the Government has recently been funding, is required to use a model lease – agreed by would help to give lenders confidence they were
asking. In this article we’re going to examine its recent Making it easier for people to sell the home lenders, the Government, and Housing Associations. dealing with quality, customer-focused landlords
discussion paper and consider the impact. This lease sets out the tri-partite arrangement to ensure a vibrant, inclusive, and open affordable
Shared Ownership’s sales process has previously between shared owner, landlord, and lender and its housing tenure.
Making it easier for people to increase their share been accused of being challenging, which may be true existence is what gives many lenders the comfort to
of the property in some scenarios (particularly where the scheme is offer mortgage finance. Summary
less prevalent or there is lower demand) – even if this
With starting shares available between 25% and 75% isn’t felt to be a widespread concern. The Government is suggesting the introduction The focus on Shared Ownership is welcome, as
of a property, and the increasing availability of loans of a new standard to encourage new entrants to the scheme continues to be seen as ‘The Fourth
requiring just a 5% deposit on that share, Shared The scheme currently has a pre-emption clause, the market e.g. non-regulated Shared Ownership Mainstream Tenure’. However, we should be mindful
Ownership recognises that for many first time buyers meaning the shared owner must first give the provision, and also suggests this would encourage of not fixing problems that don’t exist or creating
the hardest part of purchasing a property is raising a landlord the ability to market the property for eight more lenders to join the market. solutions to problems that aren’t as effective as
deposit. With Shared Ownership, that initial share can weeks. In some situations, this can be a troublesome alternatives could be.
become 100% through buying additional shares in task e.g. where the shared owner has staircased to These two aims are potentially unlikely to be met
minimum 10% increments (“staircasing”). 80% in a higher value area and cannot find someone as a result of any model lease change. For new
within the income cap who is able to buy that share. landlords, the ability to innovate could inadvertently
While it’s true not all customers will want to staircase, be restricted as part of the lease e.g. a provider
for those who do the 10% requirement can be a The Government is considering making things easier could be forced to offer staircasing in 1% increments,
by making the process slicker. A customer can offer Matt Bartle
hurdle. The Government has suggested lowering potentially counter to the way they wish to offer
this requirement, and highlighted how Metropolitan the property back to the landlord on a first refusal a scheme. Shared Ownership has never been in Director of Products
06 NEWBUILDNEWS NEWBUILDNEWS 07
Modern Methods Of Construction
PropTech is moving at a rapid pace and helping could include component sub-assembly (light fittings, How can the construction industry attract and and we remain at the forefront of the Green
to shape the modern housing market. Innovation windows, door furniture); panel systems; bathroom retain talent in this challenging market? Mortgage movement.
is high on the agenda for most firms operating pods, multiple pods to form apartments or even
within the industry and that is particularly the complete houses. This is certainly a challenging area for housebuilders Many other lenders, large and small, are making
case in the construction sector. This is an area due to the current low level of new entrants, an similar moves to help grow the new build sector and
looking to generate a range of solutions to help Traditional construction methods have been used for ageing existing workforce and the impact that political there is every reason to suggest that this support
close the labour skills gap, create environmentally many years and are well understood by consumers uncertainty may have on the future labour pool. On network will continue to strengthen despite any
sustainable buildings and challenge how quickly and the construction industry. Traditional house a more positive note, modular construction requires lingering political and economic uncertainty.
good quality homes can be built. In order to do builders favour the established approach and a more varied skillset and offers improved safety and
there is currently a limited adoption of MMC, but working conditions. Factors which could attract a The intermediary opportunity
this, it is increasingly turning to modern methods of
construction – modern, but not always new. our expectation is that this will change, for several different kind of workforce to potentially breathe new
When looking at the construction industry and MMC,
reasons. life into the construction industry.
it’s clear that a balance needs to be found between
Pre-fabricated housing was commonplace after the
Also relevant in developing and shaping the How are lenders supporting the new build quantity, quality, affordability and accessibility. This
Second World War, whilst student accommodation
construction industry is the advancement of process? remains an ongoing challenge but one which the
and hotels have successfully tapped into the use
Construction Robotics – from 3D Printing to intermediary market would benefit from gaining a
of off-site manufacturing over the past couple of
brick laying robots used onsite during masonry Innovation remains key for developers and house better general understanding of.
decades. We are now starting to see those principles
construction. builders, whether this be via construction types
being embraced with real intent across all forms of A greater number and wider variety of opportunities
or ways in financing a range of projects. And it’s
tenure – owner occupiers, social housing, shared will emerge from the new build sector. And it will
How can Modular Construction play a more important for lenders to support this process where
ownership, retirement living and Build to Rent – in be those intermediaries who are best positioned to
meaningful role in addressing the housing crisis? possible.
an effort to address the UK’s housing crisis and help recognise which kinds of doors these might open,
increase supply levels to reach the government’s The house building industry, with its existing In terms of our work as a lender, we have - in and for what type of client, who will put themselves in
delivery goal of 300,000 new homes each year. operating model and structure, looks unable to partnership with Homes England – recently agreed a prime position to maximise this potential.
deliver the number of homes required to address the £155.3 million of loan funding to accelerate
What is Modular Construction?
UK housing crisis. Addressing the housing shortage the construction of hundreds of new homes in
‘Modular’, ‘MMC’ or ‘Pre-manufactured’ are generic is a political priority and there is increasing policy Wimbledon and Southampton. We’ve also increased
terms used to cover all processes intended to reduce support for innovative methods to unlock supply. lending on new build up to 90 per cent LTV for Matt Aston
the amount of on-site construction activity. This houses and 85 per cent LTV for flats and maisonettes, New Build Manager
08 NEWBUILDNEWS NEWBUILDNEWS 09
First Time Buyers And Help To Buy
First Time Buyer sector in good health in 2013 and, subject to customers passing the additional sales of new build homes as of December • Self-employed, minimum 1 year’s trading
affordability and sustainability assessments, the 2018. Around 81% of all buyers supported by the • Up to 4 incomes accepted
In its recent report, First Time Buyers UK Market government will lend them up to 20% of the property scheme have been first time buyers (FTBs).
Trends Report 2019¹, Research and Markets • Contractors and short work history
value on a new build property (up to 40% in London
estimated that First Time Buyers (FTBs) borrowed and up to 15% in Scotland). The scheme currently HTB is due to close in March 2023 and, from April
Dedicated New Build team and process
almost £60 billion to purchase their first homes in benefits both first and second time buyers, and some 2021, it will be available only to FTBs and for homes
2018, 4.4% more than in 2017. The report estimates lenders can also help with remortgaging or staircasing with a market value up to a regional price cap. After Vida understands the specific requirements of the
the value of FTB mortgage advances will rise further (buying extra shares in a shared ownership property). March 2023, by which time the NAO expects the net New Build market and provides a fast-tracked initial
by 4.3% in 2019. amount loaned through the scheme to have peaked offer lasting 6 months, extendable by another 6. Vida
In England, London & Wales, the government at around £25 billion, the government does not has also created a dedicated New Build business
It is no secret that FTBs continue to face many loan is interest free for the first 5 years, with a £1 currently intend to introduce another loan scheme processing team to ensure that customers are able
challenges in their quest to buy their first home, monthly fee applied for servicing the loan. From like HTB. With the introduction of the new regional to exchange within the 28-day period that house
including increasing house price to earnings ratios, a year 6 onwards, the customer pays interest at 1.75% caps, builders are likely to build houses at price points builders expect.
lack of house building, increasing rental costs making of the amount of the equity loan. In Scotland, the below these caps to ensure that borrowers can
it harder to save and tougher high street lending government loan is interest free and for an indefinite still take advantage of the scheme and, despite the For more information on how Vida’s expertise in
criteria. period. ultimate withdrawal of the HTB scheme, builders will specialist mortgage lending can help you build your
be focused on offering FTBs greater choice than ever. business in the Help to Buy New Build market, call
However, the sector is still a buoyant one as FTBs Future market opportunity 03300 246 246 and talk to one of Vida’s experienced
have shown flexibility and resilience. They are Vida Homeloans HTB highlights telephone business development managers.
choosing longer mortgage terms, taking advantage of From launch in April 2013 until December 2018,
competitive mortgage rates, buying jointly with friends £11.7 billion was lent in England to homeowners via Vida is offering a range of products to support the
and family and using state-backed financial support the HTB scheme, according to figures published by HTB schemes in England, London, Wales & Scotland, Sources:
schemes, allowing them to afford more expensive the National Audit Office (NAO). 211,000 loans were based on the following key criteria:
properties and buy at an earlier age than would have completed using the scheme. ¹ https://www.researchandmarkets.com/reports/4843061/first-
been the case. • Available to FTBs, movers and remortgage (£ for £ time-buyers-uk-market-trends-report-2019
In its June 2019 report Help to Buy: Equity Loan or staircasing) ² https://www.nao.org.uk/report/help-to-buy-equity-loan-
Encouragingly, the report estimates that between scheme – progress review², the NAO noted that, scheme-progress-review/
• Up to 80% LTV for a Scottish purchase, 75% in
2019 and 2023, the amount borrowed by FTBs each between April 2013 and September 2018, 38% of England, London & Wales
year will rise by 38.9%, to reach over £80 billion in all new build property sales were supported by HTB
• Up to 85% LTV remortgage when staircasing –
2023. The average advance is forecast to rise to loans (around 4% of all property sales during this
the first specialist lender to offer this
£191,504 in 2023, compared with £169,879 in 2019. period).
• Family gifted deposits in combination with
The Help to Buy Scheme According to the NAO, 37% of households would builder’s incentives
Louisa Sedgwick
not have been able to buy any property without • Minimum income £15k
Help to Buy (HTB) is a government initiative launched the scheme, which has resulted in around 78,000 Director of Sales - Mortgages
• Impaired and improving credit history
10 NEWBUILDNEWS NEWBUILDNEWS 11
Self Build, Custom Build And New Build Need
All Our Support
Midway through the year, many builders reported had reduced their headcount, up from 21 per cent. challenges facing the housing market, and the new housing problems, build communities, and ensure
reasonably good results but the tone in which they Employment levels for SME construction companies build sector particularly. It brings me back to one of good quality and ecologically sound architecture.’
delivered them was more subdued. Several firms remained in negative territory for the second quarter the criticisms of our largest house builders: that most
reported a drop in the number of homes sold in a row, following a five-year period of positive people don’t really want to live on a huge housing At Newcastle, we heartily agree and are thinking
over the first half of the year, citing Brexit-related growth. estate of identikit homes decked out in the same creatively in this sector. Our range of fixed and
uncertainty as a driver for slower customer demand. colours with the same layout and often, the offer of variable rate custom and self-build products are
It’s tough and not likely to get easier anytime soon. the same furniture. available to both employed and self-employed
Builders’ results highlighted how fragile the New We’ve got yet another housing minister who will borrowers. Our commitment to manual underwriting
Build market can be. The imminent end to the doubtless change again in December. Yet there People like choice. They like to be individual. They also means we are really able to help borrowers that
Help to Buy scheme continues to hang over the is movement at the top, with the government engage with the opportunity to express themselves other lenders may turn away. Speak to your Business
sector and an extension on the scheme hasn’t announcing a £36million investment fund destined to through their homes – why else do we enjoy the Development Manager to see how we can help your
been floated seriously either. We’ve also seen the support collaborative research and development, and quirkiness of period features to the extent we do clients.
entry of new disruptive institutional players with demonstrator projects designed to modernise the and put up with the headache of looking after listed
different commercial dynamics, vast resources and construction industry in the UK. buildings?
Sources:
buying power change the landscape for incumbents.
The question of landbanking also remains, with With all this as the backdrop, can we reinvigorate the If we take the BLP Insurance research as a finger in
IHS Markit/CIPS UK Construction Total Activity Index - http://
fewer homes sold being partially attributed to market? Our view is yes, there are areas of the new the air on customer sentiment, it’s quite clear to me www.infrastructure-intelligence.com/article/nov-2019/uk-
more subdued demand but also, to fewer homes build market particularly that offer real opportunity at that focusing our developers’ efforts more on self- construction-output-suffers-further-steep-decline
completed. the moment. build, allowing buyers to customise their new homes, Federation of Master Builders State of Trade Survey - https://
building in individuality and allowing them choice over www.fmb.org.uk/media/49934/fmb_state_of_trade_q3_2019_
Further evidence of the fragility was evident in the A recent survey by BLP Insurance revealed over specs such as energy efficiency measures – it’s a no digital.pdf
headline seasonally adjusted IHS Markit/CIPS UK half of residential property owners in the UK would brainer. BLP survey - https://www.pbctoday.co.uk/news/planning-
Construction Total Activity Index which posted 43.3 consider living permanently in an unconventional construction-news/unconventional-living-popular/61876/
in September, down from 45.0 recorded in August. It type of home such as a boat, tree house, converted In May this year, Victoria Prentis MP presented an
signalled a more severe downturn in building activity barn or warehouse. Apparently, the desire to leave a adjournment debate in the House of Commons,
across the UK across all three broad categories conventional house or flat is most prevalent among espousing the merits of self-build. She acknowledged
of construction work. The Federation of Master 35-54 year olds (61 per cent) with the over 55s (42 the problems with planning delays, but claimed: ‘The
Builders State of Trade Survey for the third quarter per cent) being less likely to give up their traditional government… is making all the right noises in policy
of 2019, found the number of small to medium-sized bricks and mortar home. terms, but real change has to come from creative
(SME) construction companies reporting a growing thinking by local authorities and mortgage lenders.
This might seem a fairly frivolous thing to research John Truswell
workforce had fallen, from 19 per cent to 15 per cent, Without it, we will not see the revolution in self-
– but it does highlight one of the more painful building that I seek. This is a real way to solve our Head of Intermediary Mortgages
while almost a quarter (23 per cent) reported they
12 NEWBUILDNEWS NEWBUILDNEWS 13
The Future Of The Home Ownership Dream
With the end of Q4 and the end of the year looming, Of recent first-time buyers: a first home is a 3-bed semi-detached house (21%), large and growing disparity between average earnings
we’re taking stock of what has been a busy year for followed by a 2-bed terraced (19%) then a 2-bed and average property prices is leaving a gap that
Santander. This year has seen the launch of our 40- • 64% had household incomes of more than flat (14%). Only 8% of first-time buyers looking to future generations of middle-income buyers in the
year mortgage term, the introduction of our lowest £40,000 purchase a stereotypical one bedroom ‘starter flat’. UK will be unable to bridge, leaving them completely
ever five-year fixed rate mortgage deal and our • Nearly half (47%) were couples without frozen out of the property market.
overall mortgage lending grow £3.6 billion in the first dependent children Encouragingly government figures show that the new
nine months of 2019. build sector is responding to this need with over a The government and industry must now be prepared
• Just under a fifth (17%) were one-person
third (36%) of new homes built last year being three- to think differently and work together to have a
households
A big focus for us this year has been the first-time bedroom properties. meaningful impact in helping many more first-time
buyer market, and in July we released our report • 39% had financial help from family or friends buyers on to the property ladder. Without urgent
on the future of the homeownership dream1, • 10% used an inheritance to buy a property What’s next? action, there is a real risk that the next generation
featuring a survey of 5,000 would-be first-time buyers of first-time buyers will be unable to realise their
Our research among 5,000 potential first-time buyers Three quarters of would-be first-time buyers say that
alongside industry data. Our findings underlined homeownership dream.
revealed that 38% would be relying on receiving an the government needs to do more to help them.
some uncomfortable facts about the real state of the
inheritance to get onto the property ladder. The most popular measures supported by aspiring There is an important role for mortgage brokers in
market today.
first-time buyers is extending the Help-to-Buy scheme understanding how first-time buyers perceive the
The future of the homeownership dream, a recap: However, despite these stats, the desire to own a beyond 2023 and the introduction of a cap on rent market and helping them to access the support
home remains extremely strong. Nine in ten young prices. and solutions that are available, such as Shared
Recent years have seen strong growth in mortgages. adults aspire to own a home in the future and over Ownership and Help-to-Buy which itself has helped
In 2018, first-time buyers borrowed £62 billion, a total half (51%) of the first-time buyers surveyed listed it as Other popular measures include cutting stamp duty
over 180,000 first-time buyers into a new home.
of 370,000 mortgages — the highest number since one of their top life goals more than having children for all house buyers on homes under £500,000 in
Helping inform and educate potential buyers
2006. In the same year at Santander, we helped over (27%) or getting married (19%). order to encourage more sales and free up homes
could help them tackle the barriers to buying their
31,000 first-time buyers buy a home. for first-time buyers, and encouraging landlords to
first home and help more people achieve their
So, what’s stopping them and what can be done? sell their properties to long-term rental tenants by
homeownership dreams.
While we may have seen first-time buyer numbers giving them a tax rebate.
recover from the 2008 financial crash, our report Our research identified several key factors
found that first-time buyers themselves are which would-be buyers today believe are putting Importantly for house builders the report found that Source:
increasingly pessimistic about their prospects of homeownership out of their reach which included: first-time buyers wanted the government to introduce
owning a property. In 1995-1996, 65% of those aged stronger quotas for developers to build more 1
https://www.santander.co.uk/assets/s3fs-public/documents/
• Raising a deposit (30%) affordable homes, to build more houses on the green santander-first-time-buyer-study.pdf
25-34 on a middle-income owned their own home.
Twenty years later in 2016 that figure was just 27%. • Not being able to get a mortgage on their current belt and increase the number of shared ownership
income (15%) properties available. But building the number of
Our research revealed that 70% of would-be buyers • Their credit rating (12%) homes the UK requires is politically challenging
believe that today the dream of homeownership is and will take sustained action across multiple
• The cost of stamp duty (11%)
over for many young people, while 64% believe that governments over at least a decade.
property ownership will continue to fall for future Additionally, reflecting the fact that today’s average
generations, with middle-income Britain bearing the What is clear is that without change the UK’s property Paul McCarthy
first-time buyer is 33 years old and 40% already
brunt. market is at risk of becoming the preserve of only the National Account Manager
have a child or children the most popular choice for
wealthiest young buyers over the next decade. The
14 NEWBUILDNEWS NEWBUILDNEWS 15
Nationwide’s Guide To New Build
Nationwide has supported new home buyers since brush. That is why it is good to see bodies, such as Why is that important? Well it allows us to have the the new build sector, from acceptance of different
its founding days and this remains at the heart of our the Home Builders Federation, on a quest to shift this right conversations early on, be on the front foot construction types, such as Modern Methods
purpose as a mutual. When it comes to new build, the perception and shake off the poor image. with the developer, and understand their intent and of Construction (MMC) and Office to Residential
Society is and has been a big supporter of the sector, long-term plans. It allows us to create certainty of conversions. It provides information on the different
working alongside builders, brokers and trade bodies, For Nationwide there’s a huge desire to support new acceptance and helps avoid unnecessary stress and schemes we accept and the core aspects of our
and we are often amongst the first to embrace build and that goes back to our core purpose. We angst down the line. It also means we can be precise criteria. It also explains how we’re set up to support
government schemes and initiatives. want to ensure that first time buyers can achieve their in our approach to exposure limits for individual new build and where to go for additional support.
goal of a home of their own, whilst ensuring we can developments. Every development is different;
Key to the sector are builders, who themselves help make the process as smooth as it possibly can demand, reliance on schemes and incentives, and We hope you find it a useful resource, and it becomes
play a vital role in the UK housing market through be. the desirability and quality of homes means no two your go to guide for matters new build.
the creation of new communities containing good developments are the same. With this approach, for
quality, energy efficient homes where, on the whole, In being ever-present we’re fortunate enough over
the best developments we can set our exposure as
standards are high and satisfaction is rising. time to have developed an intricate understanding
high as 40%.
of the sector, with experts who have acquired
However, that isn’t always the case. Open a knowledge and skills over many years. Our valuation The insight received from our Area Valuers helps us
newspaper or watch the TV and there will be negative team is a prime example of this and is uniquely build understanding and shape policy changes, and
stories on a range of issues, including poor quality, positioned in the market. Our Area Surveyors across it also helps us better support our brokers and liaise
at times incomplete and leasehold practices and the country are tasked with being proactive in with our panel valuation firms.
incentives. gathering insight, being up to date on developments,
understanding regional and local trends and having We’ve decided to put some of that valuable insight
Andy Dean
As a result, while some of that may be warranted, it knowledge of which builders are doing what and to better use, so we’ve created a Guide to New Build. Head of Intermediary Support
does tend to tar the entire industry with the same where, even before a spade has hit the ground. It is designed for brokers and gives our insight into & New Build
16 NEWBUILDNEWS NEWBUILDNEWS 17
Principality - Where New Build
Homes Matter
Introducing our New Build Business Development the aim to achieve a quota of 300,000 new homes Our key criteria below specifically highlights how we • Answer any queries before you submit your case
Manager – Niki Willacott a year by 2020. However, as the ONS noted, the may be able to help support your New Build business. via our experienced Intermediary Support Team.
current situation remains some way short of the • Provide a dedicated underwriter for your case
I have over 20 years’ experience in the mortgages government’s target of 300,000. Key Criteria:
to be on hand when you need them so you
industry and will be providing valuable support to the
• We can lend up to 90% LTV on Residential new have direct access to the decision maker of your
Society’s broker network. There is good news for the affordable housing sector,
build flats and houses in England and Wales application.
where the number of new homes to be built in both
My extensive experience includes 12 years in the affordable and rental sector in the UK continues • We can lend up to 75% LTV on Buy-to-Let new Get in touch
Mortgage advisory positions for the Society both to rise significantly with 3,875 new homes being build flats and houses in England and Wales
as an Advisor and Team manager, as well as my registered in these sectors in August 2019, which For more information regarding New Build you can
• Extendable offer period - Initial offer period of
previous position as a broker for Moneypilot. From is a 19% increase from August 2018.2 It’s recently call Niki on 07870 982 196, email her at newbuild@
6 months which we can extend for a further 6
this I’ve gained a wealth of knowledge and having been announced that the Armed Forces Help to Buy principality.co.uk or visit our New Build webpage by
months
worked as a Broker, I understand the value of clear Scheme has been extended to the end of 2020 will searching for ‘Principality new build’.
communication, strong broker Relationships, what • We offer Help to Buy Wales, Help to Buy England
also help to boost the market and will continue to
Principality can offer and I’m very well educated with and Armed Forces Help to Buy up to 75% LTV on
help our armed forces take their first step on the
our lending criteria. selected products Sources:
property ladder. Since its launch in 2014 the scheme
has help over 18,000 armed forces personnel and *All points above are subject to affordability and 1
https://www.gov.uk/government/publications/uk-house-price-
The New Build Housing Market
has lent over £280m. lending criteria index-summary-august-2019/uk-house-price-index-summary-
august-2019
The New Build property market is an ever changing
There was also good news announced for home Why Principality? 2
http://www.nhbc.co.uk/media-centre/articles/statistics/Stats-
and challenging landscape which continues to grow
buyers last month, there will be an increase in focus June-August-2019/
and has become more of a ‘focus area’ for lenders,
on the new build sector regarding the quality of Based on your feedback about what’s important to
intermediaries and networks. House prices in the
New Build properties following the Queens Speech you, we’ve made five promises you can trust us to
UK have continued to grow and we have seen an
in October. The Government has proposed a keep.
increase of 1.3% in the year to August 2019 with the
new building safety regulator and a separate New
average house price at £234,853 and the average We promise to:
Homes Ombudsman to which new build developers
new build at £282,051 (June 2019).1
must belong to. It is thought that the ombudsmen
• Give you 48 hours’ notice of product withdrawals
According to official data from the Office for National will “protect the rights of Home Buyers and hold
by email before we make any changes.
Statistics (ONS), the number of permanent new developers accountable”.
• Speed up your process by instructing valuations
dwelling completions in the UK grew by 2.1 per
How can Principality help? on the day your mortgage application is
cent in 2018 to 198,930. This was compared to the
submitted.
almost 14 per cent growth in 2017 which took the We’re committed to supporting the New Build market, Niki Willacott
total number of completions to 194,770. Homes • Assess each case on its own merits and take New Build Business
and as a result we have tailored our lending criteria to
England was launched at the start of 2018 with a common sense approach to consider each
support your New Build business.
individual case based on your customers’ needs.
Development Manager
18 NEWBUILDNEWS NEWBUILDNEWS 19A S EA SY A S
Newbury Building Society: helping your
clients get a slice of the homeownership
pie with Shared Ownership
The Newbury recipe:
A mix of fixed rate and variable mortgage products
We lend to 95% of the share being purchased
2, 3 and 5 year mortgage products
We lend on new build houses and flats
Remortgage and existing borrower product transfer mortgage products
The Newbury method:
We lend across England and Wales
No credit scoring - all cases are assessed on individual merit
Tailored underwriting with each case individually considered
A dedicated helpdesk
Call: 01635 918000 | Email: brokerenquiries@newbury.co.uk
Website: www.newbury.co.uk/intermediaries/
Newbury Building Society is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the
Prudential Regulation Authority (Financial Services Register number 206077). English Law applies and we will communicate with you in
English. We are participants of the Financial Ombudsman Service. We have a complaints procedure which we will provide on request.
Most complaints that we cannot resolve can be referred to the Financial Ombudsman Service. 7755You can also read
