New build mortgages are a growing opportunity


​A new build home is often the first step for home buyers looking to get on the housing ladder. 

Article date: 14/03/2019

With the current housing shortage and high cost of property, a new build home is often the first step for home buyers looking to get on the housing ladder or move out of rental accommodation to a home of their own. New builds can deliver the type of home needed with no renovation work required and finance options available in the form of specifically designed mortgages and Help to Buy products. 

New build properties should also come with warranties such as NHBC Buildmark which provides a quality warranty and resolution service for any defects or even contaminated land in the first ten years from completion, this protects the customer’s investment and provides peace of mind to both customer and lender. 

The Ministry of Housing reports^ that in England in 2018 (in the year up to June 2018) new build dwellings  totalled 160,020, which is down by 3 per cent compared to same period in 2017. During the same period, completions totalled 161,240, an increase of 5 per cent compared with last year.

With completions on the rise, there are opportunities for brokers to choose specific products from mortgage lenders with criteria and underwriting guidelines geared towards customers looking for a new build as a way of starting their property ownership journey. 

The Government-backed Help to Buy scheme has already helped over 420,000 home buyers^^, and it is designed to assist people who have smaller deposits to buy a newly built or a first home in England and Wales, making the purchase more affordable, as such it remains a popular choice with First time buyers. 

At Leek United however, we offer a highly competitive 95% LTV on new build mortgages, this can be a real help to buyers in this market, it keeps the deposit requirement low and helps them purchase their dream home. It’s been a popular route and we’ve helped many borrowers who have benefited from the higher loan to value products available to them.

A new build, however, may not only be a brand new house built from scratch, it can also be defined as a property converted to a residential dwelling, including flats and apartments, or has not previously been used as a residential home. These options open up the opportunities for brokers and lenders to a wider pool of housing stock and so increasing the scope of properties that can be considered for a new build mortgage.

The process for getting a mortgage is the same regardless of whether the house is a new build or not, however, some lenders will regularly check the value if there is a long time lapse between the application and completion. 

With the Government determined to grow the number of new build homes over the next decade, the demand for mortgages to buy them is expected to continue to increase. It makes sense for brokers to ensure they are working with lenders who can deliver innovative products and flexible underwriting capability to help maximise their business in this sector.