New-build property is an ideal investment for a wide range of buyers, from first-timers to home movers and property investors, and there are calls for more measures to boost the market.
There is much speculation that the UK housing market will feature more heavily in the upcoming Spring Budget than it did in the Autumn Statement, where there were surprisingly few mentions of the sector. Many in the industry are calling for some big changes, from tax cuts to housebuilding incentives.
The new-build property market is a key aspect for the government to look at, as boosting the country’s housing supply is widely acknowledged as a priority at the moment. Michael Gove has already revealed plans to relax planning rules to spur the market on, and there could be more on this in the Budget.
The hugely popular government-backed Help to Buy scheme, which is no longer in operation, contributed towards new-build property construction as it offered first-time buyers a helping hand when purchasing a newly constructed home. Unsurprisingly, this was top of the wish list in a new survey of property professionals.
More than a third (35%) of respondents said they hoped to see the reintroduction of Help to Buy in the upcoming Budget, or something to help boost the new-build property sector and support first-time buyers. Just over a fifth (22%) said a stamp duty holiday or reduction was on their wish list, while 17% wanted an inheritance tax cut.
Stamp duty incentives for downsizers was the popular choice for 16% of people in the survey, which was carried out by Countrywide Surveying Services, while 10% wanted additional landlord support – something which has also been brought up by industry bodies including the NRLA.
New-build property incentives
Although Help to Buy is currently no longer an option, there are other schemes available that incentivise investing in new-build property. One of these is Deposit Unlock, which allows buyers to purchase a new-build with a 5% deposit via select lenders and housebuilders.
Those who take advantage of this scheme can get competitively priced mortgages, making buying a new home more affordable than it might be otherwise.
Individual developers will also offer their own schemes and incentives for buyers, such as offering a type of ‘cashback’ option to help fund your deposit, or providing a contribution towards stamp duty, legal fees or other costs involved with your properties.
A growing number of lenders are also offering “green mortgage” products which can sometimes be used to buy new-builds. These can offer lower rates than might otherwise be available, and tend to be specifically for properties with top energy efficiency ratings, which new-builds tend to have.
Aside from financial incentives, the energy efficiency of new-build property is a bigger draw than ever for homebuyers and investors alike with energy bills remaining considerably higher than they were a couple of years ago. Environmental awareness is also growing, meaning an energy efficient home is higher on people’s agendas.
The 10-year new-build property warranty that comes with new homes offers an extra layer of protection and assurance for buyers, serving as an incentive for many as it covers many potential costs for the first decade of ownership. In some cases, this warranty can also be extended.
Housing market optimism
Countrywide Surveying Services also carried out a poll looking at the UK property market for 2024, and found that 41% of people said there was “cause for optimism”. The same percentage also said there was “possibly” cause for optimism, indicating that the general consensus is a positive one for the year ahead.
The remainder was made up of 13% who said they were unsure about the housing market in 2024, with 5% saying there was “probably not” any cause for optimism; but 0% said there was definitely no cause for optimism.
A further poll also highlighted the various housing issues that matter at the moment, with people calling for an increased supply of social housing, improved planning processes in local government to boost housing supply, help for first-time buyers and more tenant protection when it comes to “no-fault” evictions.
Martyn Stones, Director of Technical Services at Countrywide Surveying Services, said: “It’s clear from these results that the industry is looking for the Government to generate some additional assistance when it comes to opening the doors for more first-time buyers and in helping to bridge the gaping supply gap which continues to widen, especially from an affordability perspective. And I’m sure this applies to whichever party happens to be in power.
“The upcoming budget has the potential to have a major influence on the housing and mortgage markets and it will be interesting to see what, if any, of the highlighted measures come into effect and their short, medium or longer-term impact.”
