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Demand For New Homes Increase

published on 30/06/2020  

Demand for new build homes has soared by 66% since the housing market reopened, surpassing levels seen before lockdown.

The upsurge seen in the six weeks since 13 May is a continuation of the trend recorded at the start of 2020, when the new build market enjoyed its strongest start to the year since 2016.

The recovery in the new build homes sector significantly outpaces the revival in the market for older properties, where demand is currently 46% higher than before lockdown.

The surge in demand for new build properties has been particularly strong among first-time buyers, growing by 87% compared with levels during lockdown.

The resilience of the new build market is likely to be down to two factors.

On the one hand, developers are used to having to sell homes when physical viewings are not possible.

At the same time, demand is also likely to have been supported by the fact that the Help to Buy scheme can only be used to purchase a new build property.

With many lenders withdrawing their 90% and 95% loan-to-value (LTV) mortgages in the face of the pandemic, more first-time buyers in particular are likely to be turning to the scheme in a bid to get onto the property ladder. The Help to Buy initiative tops up a 5% deposit with a five-year interest-free loan worth 20% of the property’s value

First-time buyers are often described as being the lifeblood of the housing market, so it's good news for the new build sector that demand is so strong among this group.

This comes as Prime Minister Boris Johnson unveiled plans for more than 180,000 new affordable homes to be built. He also announced changes to the planning system to make it easier to convert commercial buildings into residential ones, and to demolish vacant buildings and use the land to build homes.

Property owners will also be able to build additional space above their properties through a fast-track approvals process. Tags: New Homes, Demand, Increase