The new-build market has enjoyed a buoyant few years recently, according to Douglas Cochrane, and this has helped housebuilders, lenders and brokers working in the sector.
He says: “There’s been a resurgence in new-build, thanks in part to government initiatives like Help to Buy. This has encouraged developers to invest, and helped many first-time buyers get on the ladder by improving affordability.
“But this growth shouldn’t disguise the fact that this is a complex market. Lenders are increasingly recognising the importance of this sector and that it takes time to establish a presence. We’ve been in this market for 20 years and, over that time, have developed our award-winning new-build proposition.”
Ian Wilson adds that Halifax Intermediaries has grown by forging links with both brokers and major housebuilders.
“My business development teams focus on the broker market, building and strengthening relationships with these essential intermediaries. Housebuilders, recognising the complexities of buyers’ needs, forge relationships with brokers, creating a strong intermediated market. This is a very important market for us.
“Many brokers we work with specialise in new-build because some housebuilders operate preferred panels whereby the broker is available seven days a week to qualify potential buyers and help them quickly navigate the mortgage market. Through our strong relationships with these brokers, we understand what they need, what their clients want and how we can deliver this.”
There is a particular need in the new-build market for applications to be handled in an efficient and timely manner
When it comes to the broker market, there are a number of key priorities, Wilson says.
“Brokers want a choice of products. We have helped create alternatives for those who have smaller deposits, so there are other options besides the Government-supported schemes.”
For example, Halifax Intermediaries is one of few lenders to offer a mortgage on new-build property, through controlled distribution, with just a 5 per cent deposit — including flats.
“Pricing is important, as it is elsewhere in the market,” says Wilson [pictured]. “So we must ensure all our new-build products are competitively priced.
“The other major consideration is service standards. Again, this applies to the lending market in general but there is a particular need in the new-build market for applications to be handled in an efficient and timely manner, to give customers certainty and to achieve exchange deadlines.”
Halifax has invested in building bespoke services to ensure it can process an application in 10 days.
“We know how important it is to turn around applications quickly, particularly at key seasonal times, such as towards the year-end when there is a larger volume of completions,” says Wilson. “We’ve built our agile service proposition to ensure there are sufficient resources to handle these increases.”
Halifax Intermediaries also works closely with the major housebuilders to understand their strategic priorities, which is where Douglas and his team come in.
The company also liaises with government departments and housing bodies. Cochrane says: “New-build is an important part of housing policy and we want to be able to adapt to changes and help inform future policy.”
This is part of the group’s corporate and social responsibility objectives, he adds. The lender is proud to work with builders and regulators that ensure new-build homes meet the highest standards on issues such as energy efficiency.
Cochrane is optimistic but says the sector faces challenges in the years ahead, one of the most pressing being whether the Government will replace the Help to Buy scheme.
“A good proportion of sales at present are supported by Help to Buy, especially first-time buyers,” he says. “But funding for the scheme is not guaranteed beyond March 2021.”
However, Cochrane does not think the sector has become over-reliant on this funding. “The Government has made it clear one of its priorities is to boost housebuilding and help first-time buyers get on the property ladder. We look forward to hearing more about how it plans to achieve this.”
Wilson adds that demand from homebuyers could slow during the coming year. The sector is in good shape, however, to weather the cross-winds, according to Cochrane.
“Before the last recession, around half of all new-builds were apartments. This created problems for lenders as builders’ sales tactics focused on multiple properties becoming available at once, often concentrated in close proximity. Now, most of the new-build market — outside London at least — is focused on houses, which tend to come on stream in smaller tranches.”
Government schemes, regulation and economic conditions invariably all change over time. And this is where Halifax Intermediaries’ experience comes in to play, says Wilson.
“We’ve been in new-build for 20 years. We’ve seen housing price booms and recessions, and we know the impact these can have on the mortgage market in general and the new-build market in particular.”
He adds: “We are confident we will continue to develop a range of lending options for our brokers and their clients in this important sector — whatever the future holds.”
Douglas Cochrane is head of housing development at Lloyds Banking Group
Ian Wilson is head of intermediaries at Halifax Intermediaries