Demand for new-builds is clearly there and looking ahead, it may only rise from here. The latest New-Build Demand Index revealed almost a fifth of all new homes listed for sale across the market in Q1 had found a buyer, similar results compared to the year prior according to Ceres Property.
But, in major cities, demand for new builds is ramping up. In England, Manchester has seen the largest increase in the appetite for new homes, with demand jumping 3.2% year-on-year. Nottingham (1.9%) and Leicester (1.5%) have also seen noticeable growth.
Meanwhile, in Southampton, 29.1% of all new-build homes currently listed for sale have found a buyer. Bournemouth (22.4%), Sheffield (22.4%), Bristol (21.2%) and Newport (21.2%) are also proving to be new-build hotspots.
New-build property prices are also racing ahead in certain locations. The North East of England is outperforming the rest of the country when it comes to property price growth according to SAM Conveyancing, with new builds specifically seeing a jump of 33% over the past year. In this region, the average price for a new build hit £338,429 by December 2024, 118% higher than the average for second-hand homes.
There are likely many reasons behind this demand, but oncoming legislation may be playing the biggest role here. Net zero, EPC targets, the Renters’ Rights Bill – all these and more are coming, and they’ll be forcing property investors and landlords to up their green credentials. One relatively easy way to achieve this is by investing in new stock.
New homes can be up to four times more energy-efficient than a home that hasn’t been recently built. Many come to the market with the highest EPC rating available.
As we push into 2025 and beyond, more property investors and homeowners will likely recognise the significance of this. But, as more borrowers potentially try to get in on the action, they may be hit by roadblocks.
The new home “premium” will weigh on budgets. The quality of some new homes may lead to additional refurbishment costs. The “risk” associated with new builds may limit how much support borrowers can receive from mainstream lenders.
Fortunately, the specialist lending market can help with all these issues and more. At Market Financial Solutions, our acquisition loans can stretch up to £50m, ensuring borrowers won’t be held back by particularly high entry costs. Our Permitted & Light Development loans can be put towards a range of cosmetic and structural projects. Moreover, across all our products, we can embrace a broad range of complicated real estate options, or investment set ups.
The bespoke finance industry adapts to the trends that emerge from the property market. We’re ready for whatever comes next.