We are nearly closing yet another successful and productive year for mortgage advisers in the new-build market, riding the wave created by the huge focus on the country’s need for more housing.
It is a sector supported by government initiatives, not least the popular and straightforward Help to Buy equity loan scheme, five years old next April. Since this facility caught the attention of first-time buyers, it has been a case of whether housebuilders can keep up with the strong demand for new homes.
That said, as we look ahead to 2018 and the continued political and economic uncertainties, we already know it will be a critical year for Brexit negotiations.
The final agreement may or may not adversely impact on consumer confidence in the housing market. It is a case of wait and see.
The country is still taking full advantage of the demand for new housebuilding right across the land.
Before that — and by the time you read this — Chancellor Philip Hammond will have made his Autumn Budget speech. Will there be any move on stamp duty to assist the market? An early Christmas present perhaps for first-time buyers? Or more effort from the Government to implement the white paper initiatives announced back in February but delayed by changing housing ministers and, of course, June’s fire tragedy at Grenfell Tower in London?
Earlier this autumn, the industry widely welcomed the prime minister’s announcement that a further £10bn injection had been granted to the Help to Buy scheme in England to ensure it met demand through to 2021.
Advisers continue to have this in their product armoury for the next three years. For private developers, however, their eyes are firmly set beyond 2021 as they try to second-guess government support for housebuilding and how the country’s economy may look outside the EU.
We expect Hammond to have provided more guidance on this in the Budget, along with other announcements to boost the supply of homes, particularly affordable ones. If not, the longer-term apprehension about what lies beyond 2021 will remain.
This concern was underlined by Home Builders Federation policy director David O’Leary in a recent article in Housebuilder magazine, laying out a variety of options for the future of Help to Buy in order to avoid another type of ‘cliff edge’ scenario, in 2021.
While there are many options that may come into play, O’Leary concludes that “adjustments to the maximum equity loan level for non-first-time buyers would probably have the least disruptive influence on the majority of builders or buyers”.
All in all, though, it has been pleasing to see some very positive statistics backing up the wider wellbeing of the new-build industry. The National House Building Council reported that new-home registrations had struck their highest third-quarter total for a decade, with almost 38,000 new homes registered, a 6 per cent increase on the same period last year.
Seven out of 12 UK regions experienced registration growth during Q3 2017 against 2016. Among those areas with the most significant growth were the West Midlands, East Midlands, eastern England, the North-east and Scotland. The region with the most notable fall was Greater London.
The final Brexit agreement may or may not adversely impact on consumer confidence in the housing market
Given these registration figures were recorded in the summer period, we can expect a continued rollout of completions over this winter and well into 2018.
Also, for England, the Department for Communities & Local Government recorded the most planning applications granted in a 12-month period — 384,000 in the year to June 2017 — which, while not all for residential use, goes to show the country is still taking full advantage of the demand for new housebuilding right across the land.
A distraction for business owners in what will be a pivotal year for the country comes in the form of more regulatory legislation that fundamentally changes how businesses manage customers’ information.
The EU’s General Data Protection Regulation is set to come into force on 25 May and will affect all firms, particularly those that receive leads from corporate introducers — including in the new-build sector— housebuilders and developers.
So there is plenty for us all to consider and plan for over the Christmas and New Year holiday.
James Chidgey is new homes relationship manager at Mortgage Advice Bureau