For young expanding families, making a move is often a necessity rather than a want and when stock was an issue in the second-hand market at the start of the year, families who had previously not considered new build began factoring it into their plans.
For families, the three main criteria for a home are usually flexibility, space and convenience. Those looking to make their next move will often be thinking about things like storage, parking, ability to divide space, easy access for buggies and outdoor amenities.
Previously our researchers have talked of the missing new build market, those who would be more likely to buy new build in family-friendly locations (near schools and parks) if homes were available.
Our latest research shows this strong demand has continued – partially driven by limited choice for larger second-hand properties. In the first quarter of this year, regional new homes reservations were up 41 per cent on pre-pandemic reservations compared to the same period in 2019.
But even with this level of opportunity there are headwinds affecting the market. Particularly with Help to Buy ending (reservations must be made by October 31, 2022) how can developers remain competitive?
New homes supply continues to be constrained by a lack of labour and materials shortages. The bottleneck in imports created by Covid restrictions has been replaced by the ongoing conflict in Ukraine, resulting in rapidly inflating build costs.
Domestic products are also harder to obtain. Bricks, cement and roofing products have all become increasingly difficult to source as well as being more expensive to produce due to the rising cost of energy. These challenging build conditions threaten future housing delivery.
But at the same time new builds are increasingly attractive. The recent cost of living crisis has encouraged many people to look at just how much they are spending on running their homes. As a result, buyers are more and more aware of the savings from living in a more energy-efficient property.
Tightening sustainability standards mean new build stock is typically more energy efficient than second-hand stock. Savills analysis calculates an average 55% saving (equivalent to £983) on projected annual costs for lighting, heating and hot water when purchasing new build over second-hand.
A growing number of mainstream lenders also offer ‘green mortgages’, which provide preferential interest rates or cashback to energy-efficient homeowners, providing further potential savings.
New build also has the advantage of being more easily adaptable to emerging green technologies, such as installing low-carbon heating alternatives like heat pumps or supporting the increasing popularity of electric vehicles by providing charging points with all homes.
Getting ahead of the curve could see the emergence of a ‘green premium’ for new build homes, with 59% of respondents to a recent Savills survey saying they would pay more if a property’s energy was powered by renewable sources.
Housebuilders who go beyond the minimum requirements are likely to better future-proof their developments and entice a larger pool of buyers who are increasingly motivated by cleaner and cheaper ways of living.
For advice about the new homes market in Suffolk contact Max Turner at Savills on 01473 234826 or email MTurner@savills.com
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