Episode 4 | New build

New build mortgages and the changing housing market

What's next for the new build market?

In the fourth episode of our Powered by Partnership podcast, Francesco Di Pietro, Head of Intermediary Mortgages at Newcastle Building Society, is joined by Mark Pender, Director at MAB New Homes, and Greg Cunnington, Head of Strategic Accounts at Legal & General Mortgage Services, to explore the changing new build market.

Together, they discuss the challenges facing new build homes, from the end of Help to Buy and ongoing affordability pressures to the perceived 'new build premium' and the importance of specialist knowledge. They also explore the role brokers, lenders and developers can play in helping more clients access new build homes. 

Although this episode was recorded before the proposed Your First Home scheme was announced, the discussion explores many of the challenges that continue to shape the new build market, from affordability and deposits to access to homeownership.

Understanding the new build market

The new build market has changed significantly in recent years. Affordability pressures, rising build costs, changes in consumer confidence and the end of Help to Buy have all influenced demand.

The episode explores how these changes are affecting buyers, brokers, lenders and developers, as well as the differences emerging between regions and different parts of the new build market.

For brokers, understanding the local market and the factors influencing demand can help when discussing new build options with clients.

Supporting first-time buyers after Help to Buy

The end of Help to Buy has changed the options available to first-time buyers considering a new build home.

The guests discuss how buyers may now have different expectations around deposits and monthly payments, and why starting conversations early can help clients understand what may be possible.

The discussion also highlights the importance of helping clients understand their mortgage position before they begin their property search. For some buyers, a lack of awareness about their options can mean they assume home ownership is out of reach when they may have routes available to them.

For brokers, early advice can help clients understand their affordability, explore potential mortgage options and make more informed decisions.

Is there a 'new build premium'?

One of the key topics discussed is whether new build homes carry a genuine premium compared with second-hand properties.

The guests explore why this isn't necessarily a straightforward comparison. Location, property type, build quality, energy efficiency, running costs and the individual circumstances of the buyer can all influence how a new build property should be assessed.

The discussion also considers the potential benefits of newer homes, including energy efficiency, lower running costs and features that may already be incorporated into the property.

Rather than treating new build and second-hand properties as one-size-fits-all choices, the conversation highlights the importance of understanding what works for the individual client.

What makes a new build specialist?

The episode explores the difference between being a broker who does new build and being a genuine new build specialist.

New build transactions can move quickly and involve different considerations from a traditional second-hand purchase. Understanding the market, knowing lender criteria and being able to respond quickly can all be important when supporting clients.

The guests discuss the value of developing specialist knowledge, building strong relationships with developers and lenders, and understanding the specific needs of new build clients.

For brokers, developing expertise in this area could also create opportunities to build their client base, particularly given the strong connection between new build and first-time buyers.

The future of new build

With continued pressure on housing supply, the discussion considers what could help support the future growth of the new build market.

The guests explore the potential role of government support, demand from buyers and greater collaboration between lenders, brokers and developers.

Ultimately, building more homes is only part of the challenge. Helping buyers understand the options available to them and supporting them through the mortgage journey is also important.

New build at Newcastle for Intermediaries

We know buying a new build can come with different considerations for clients and brokers. That's why our residential lending criteria are designed to give brokers more options when supporting clients looking to buy a new build home.

Key features include:

• Up to 95% LTV on new build houses
• Up to 90% LTV on new build flats (80% LTV for 1 bedroom flats)
• Incentives accepted up to 5%
• Extended 9-month offer validity for new build applications
• Flexible criteria designed to support a range of new build clients
• Access to dedicated BDM support

See our residential lending criteria for more information.

Key takeaways

The new build market is changing

Affordability pressures, changing buyer expectations, rising costs and regional differences are all influencing the new build market.

There are still opportunities for buyers

Despite the challenges, new build homes remain an important route onto the property ladder. Early conversations can help clients understand what options may be available to them.

The 'new build premium' isn't one-size-fits-all

The value of a new build property can depend on factors including location, property type, energy efficiency, running costs and the individual buyer's circumstances.

Partnership can support better outcomes

Working closely with lenders, developers and other industry partners can help brokers navigate the new build market and support clients through their property journey.