Government initiatives relaxing planning regulations, finally appear to be filtering through. The good news came out on the 10th August in the Office of National Statistics’ Construction Index that private housing new build figures are now higher than at any point in the past 15 years. This applied both for quarter two of 2017 and for the month of June.
There has been much rhetoric on the need for new housing and it is something that consecutive governments have failed to address. There is still much more to be done but it is refreshing to see the numbers heading in the right direction.
The housing white paper, released by the government in February of this year, was a step in the right direction indicating clear intent to relax the planning laws and eradicate some of the barriers to building. Many developers have taken up the mantle and turned this into action, which is clearly reflected in the figures of private housing new builds.
There is a win-win situation as developers’ efforts are being rewarded by a growing interest in newly built homes. It is not that many more people feel they want to live in a new build, although it is clear that some now do, but there is clearly not enough stock of existing housing coming to the market to satisfy demand. However this means that people who are desperate to move home and would normally have bought an older house are now also considering buying a new home where they may not have before. One of the biggest growth areas is the retirement market providing for older people who want to downsize.
There are of course many benefits to buying a new home: They need very little maintenance and, if the house is chosen while still in the construction phase, many developers allow the buyer to choose different elements of the property such as tiling, bathrooms and even what kitchen is put in. For both first time buyers and older people downsizing the lack of renovation, decoration or alternations required is a major plus point.
The other major positive is the lack of a chain. Of course for first time buyers there is no chain at all, however there is also an increasing number of options for people selling an existing property to eliminate the housing chain too. This can be absolutely crucial for some people as it speeds up the house buying process and can significantly reduce both hassle and stress levels.
One way of doing this is the part exchange of someone’s existing home. Here either the developer buys the person’s home, or the developer works with someone like Spicerhaart to fund the purchase. Either way it frees the homeowner up to buy their new home, without the hassle of selling their existing one.
Developers will often offer a number of incentives to save money for the people part exchanging. This can include paying survey or estate agency costs and often stamp duty as part of the part exchange deal.
The benefits to all are clear: the developer sells their new homes while the buyer can either upsize or downsize with less hassle, fewer costs and in a shorter timeframe, knowing that someone else will look after the sale of their existing home.
The other positive is that as the demand for new build increases, it in turn is likely to encourage developers to build more new homes as they feel reassured that they will be able to sell them and for the price they need. This cannot come soon enough as the housing crisis has made it incredibly challenging for many people to buy the home they need in the place they want to live. The rise in new builds and part exchange may just be the solution to that.