Exploring new builds for first-time buyers

28 February 2025

3 minutes

The latest Barclays webinar brought together two leading industry experts - Adrian MacDiarmid, Head of Mortgage Lender Relations at Barratt Redrow, and Helen Pierson, Director at Mortgage Advice Bureau New Homes - to discuss whether new build homes are the right choice for first-time buyers (FTBs), the benefits of such property types, the role of specialist mortgage advisers, and the evolving demand for new homes.

Why opt for a new-build home?

For FTBs, purchasing a newly built home comes with numerous advantages. One of the key benefits is the variety of financial support options available. Low deposit or low interest rate solutions are available through Deposit Unlock and Own New schemes, making home ownership more accessible. Other builder incentives, such as part-exchange and assisted move schemes, provide additional flexibility compared to the second-hand market, where such support is scarce.

Ever-evolving research into layouts and designs ensures that these homes meet the needs of contemporary buyers and families, including features that enhance functionality and comfort. Furthermore, new builds appeal due to fewer short-term maintenance issues and lower running costs. Their sustainability features make them increasingly attractive to buyers, with most achieving an A or B EPC rating.

Future demand for new builds

Market sentiment around new builds remains overwhelmingly positive. According to MAB data, 48% of homebuyers expressed a desire to purchase a new build property in 2024.  This reflects a notable increase from the 27% recorded in both 2022 and 2023, representing a 21% jump over the past two years.

The data also revealed that homebuyers across a range of age groups are embracing new build properties. Notably, 46% of those aged 54-65 are looking to buy new, making baby boomers the most enthusiastic demographic. Interest among younger generations is also strong, with 43% of those aged 19-25 and 32% of those aged 24-35 showing a preference for new builds. Meanwhile, 34% of prospective buyers interested in new builds already owned a property but were looking to move, and first-time buyers accounted for 33% of the new build market. 

While affordability concerns remain evident across the housing market, lower mortgage rates and greater lending flexibility are creating a more optimistic outlook. However, supply challenges in this sector persist.

Housebuilding challenges

The UK government has expressed ambition in its quest to build 1.5 million new homes. However, it was agreed in the discussion that the industry must recognise the barriers to achieving this target, including regulations on green space, water supply, and flood risk mitigation. 

Smaller housebuilders face additional pressure to meet regulatory and sustainability standards, but these measures are essential for the housing market's long-term viability. A lack of planning resources in local authorities also presents a hurdle, though the current environment is more favourable for tackling these issues than in previous years.

The role of a new-build specialist mortgage adviser

Mortgage advisers specialising in new build properties offer invaluable expertise that benefits both buyers and housebuilders. Understanding housebuilders' unique needs - such as speed, efficiency, and strong communication - is essential. Advisers must be available seven days a week, provide robust market insights, and possess in-depth knowledge of lending criteria and available incentives to support homebuilding demand and establish themselves as trusted partners.

For buyers, specialist advisers leverage their relationships and insights to provide essential guidance on navigating builder incentives, understanding various schemes, and maximising borrowing potential at competitive rates

Advice for FTBs considering a new build

For FTBs unsure about purchasing a new build home, the experts shared some key advice:

• Define priorities: Consider what matters most in a home - location, cost, amenities, sustainability.
• Visit completed sites: Seeing established developments, as well as those currently under construction, can provide reassurance about quality and community aspects.
• Seek professional mortgage advice: Knowledge is power. There’s no downside to exploring financing options with an expert in their field.

This webinar highlighted the many advantages of new build homes for first-time buyers, from financial incentives to modern, energy efficient designs. While challenges remain in housebuilding, positive market sentiment and evolving lending options signal a promising future for new build properties. Encouragingly, I came out of this with a renewed sense that, through the expert guidance of mortgage advisers, more first-time buyers can make well-informed decisions in 2025 to find a home that suits their modern living needs. And that the lending community continues to evolve and adapt to deliver the solutions which can meet this rising demand.

Source

https://theintermediary.co.uk/2025/02/new-build-demand-surges-among-homebuyers-across-age-groups/