Additional support for the building of new homes is expected to be high on the Government’s agenda throughout 2018, and with good reason.
A severe shortage of affordable housing remains at the core of this complex issue but forward strides have been, and are being, made.
The new-build sector saw a number of changes in the past 12 months and 2017 ended with the Government outlining a plan to ban leaseholds for almost all new-build homes as part of new measures to tackle leaseholder exploitation.
From a statistical standpoint, 2016/17 figures from the Department for Communities & Local Government showed that annual housing supply in England amounted to 217,350 net additional dwellings, up 15 per cent on 2015/16. This included 183,570 new-builds. However, the number of new homes coming on to the market takes us back only to levels seen before the financial crash and is still far short of the 300,000 target set by the Government. Questions also continue to arise over the quality of some new-builds; an ongoing concern that needs to be monitored closely.
Focusing on the positives, we headed into the new year on the back of heightened activity among lenders, housebuilders and purchasers. From a lending perspective, criteria have loosened (albeit slightly) and competition has intensified to incorporate a wider variety of lenders. The result is more choice, even at higher LTVs, on new-build purchases for first-time buyers and beyond.
When combined with the Government’s commitment to tackle the housing crisis, there is room for greater optimism in 2018. Whether new-housing targets are hit remains to be seen, and getting the balance right between quantity, quality, affordability and accessibility will always prove a challenge.
However, for now at least, let’s focus on the opportunities opening up in this sector and on how they can help your new and existing clients.
Tony Fullbrook is head of mortgage purchases at Barclays Mortgages