One-on-one interview: Justine Elliott, Lovell, talks first-time buyers
This week, our ongoing series of interviews with senior figures in the nation’s new homes industry turns to a national housebuilder, Lovell Homes, and focuses on the plight of first-time buyers, as we pose the questions to the company’s national sales director, Justine Elliott.
What do you find are the main concerns of first-time buyers and have you seen them change in the course of your time with Lovell?
Having the necessary level of deposit required to purchase their first home is the main concern that first-time buyers (FTBs) have, in our experience, closely followed by finding a suitable property that is within their price range or affordability. The introduction of the Help to Buy: Equity Loan has helped make buying a house a lot more affordable, with just a 5% deposit required, lower earnings levels to cover the 75% mortgage and no interest payable on the government’s 20% equity loan for the first five years. This is a huge change from just five years ago, when first-time buyers had to find a minimum 15% deposit.
Lovell has a fantastic record for recognition of its developments for FTBs - what's the secret?
Quite simply, its product type and price. We listen to our customers’ desires and requirement and try wherever possible to incorporate these into our house designs and development layouts. Other developers have moved away from building two-bedroom starter homes with many replacing these with apartments, but the majority of first-time buyers would prefer a house with a garden. Most Lovell developments include two-bedroom and smaller three-bedroom starter homes. Another important factor is that our sales executives are highly experienced at guiding customers through the purchase process. [Read about Lovell’s winning entries at recent WhatHouse? Awards]
A cheap "do-er upper" might look like a better option for some, but what do you think makes new build the right choice for FTBs?
Some first-time buyers may not necessarily have the skills required for DIY projects, they also work long hours to pay their mortgage and bills, reducing the time available to do work in their home. It is also quite common for mortgage companies to hold back retentions if there are major works to be carried out on an older property. A new-build home takes all that worry away with the added benefit that the buyer can customise the property by selecting their kitchen and bathroom. They can move straight in and enjoy their new home - and have the added benefit of a ten-year NHBC warranty for peace of mind as well as cover from Lovell for the first two years.
New homes are also more cost-effective in the long term, offering lower energy bills and easy maintenance, not to mention the fact that the Help to Buy: Equity Loan is only available on new build.
Affordability is a massive issue with FTBS, especially in London and the South East - how have schemes such as Help to Buy been received by your customers?
Extremely well. In London, 84% of the reservations taken so far this year have been with the assistance of Help to Buy while at our developments in Bath and Bristol the figure is 68%. Without Help to Buy, a good many of our purchasers would not be able to purchase at prices the market dictates. As well as assisting purchasers with getting onto the property ladder, it has enabled some to actually afford to buy a larger property meaning that they can stay in their first home a while longer. In some regions, our customers are not fully aware of how Help to Buy works. We find that we often have to explain the scheme but once people fully understand it, they quickly appreciate the benefits. In the North West, first-time buyers are increasingly aware of Help to Buy and keen to use the scheme to get the most from their hard-earned deposit.
Are common mistakes or misunderstandings that FTBs need to re-think?
The first mistake often made is not speaking to a reputable independent financial advisor (IFA). This means many first-time buyers are given incorrect information, especially about Help to Buy, if the IFA consulted is not used to new-build and its benefits. There are also common misunderstandings regarding the legal process involved in buying a home. People can struggle to fully understand the process of exchange and completion and we therefore explain this in full to each purchaser at reservation. Some people can think they have no chance of getting onto the property ladder while other first-time buyers have a specific budget in mind and are then pleasantly surprised with the size and spec of house they can actually afford once they have spoken to a reputable IFA, especially if they use Help to Buy.
Which of your current developments are making a splash with FTBs?
I guess it would be easier to ask which aren’t! Nationally, 52% of our sales are via Help to Buy, these being mainly to first-time buyers. Lovell developments taking a higher-than-average proportion of Help to Buy sales are Repton Grange in Bristol, Lymington Mews in Dagenham, Mansfield Park in Southampton, Weston Heights in Stoke on Trent and Green Bank in Greater Manchester. Our city centre developments in Manchester are also popular with first-time buyers and demonstrate how our homes can offer a great alternative to apartments by offering purchasers the best of both worlds, enabling them to stay close to the city centre yet have a driveway and rear garden.
Do your customer service team find (understandably) more to deal with with FTBs and how do you address that?
Our customer care team understand that first-time buyers are not as experienced as some of our more seasoned purchasers and are always on hand to help and guide them through every stage of the buying process and provide any extra support needed. Our customer care manager meets purchasers a week before they move in to give a demonstration of how their home works and talk them through what will happen when they move in. This helps the purchaser to feel comfortable to contact customer care if they need to for advice and guidance. Most people are very comfortable with how their home operates, however if things go wrong, our dedicated customer care team are there to advise and put it right quickly.
What's in the pipeline from Lovell later this year?
More developments! We have lots of new sites launching this year including but not limited to: East Avenue in East Manchester; a new phase in Carlisle, New Acres; two new sites in Birkenhead; Firs Park in Norwich, and The Electric Quarter in Enfield. On the horizon we also have two major longer-term developments: The Mill in Cardiff and Trinity Woolwich in Woolwich, that will be supplying properties over a number of years.
Do you have any advice or encouragement for would-be homeowners who think they may have to wait years for a decent home of their own?
Please do visit one of our developments where our experienced sales executives can guide them through the process and help them to speak to a trusted independent financial advisor and reputable solicitor who will make their journey much easier and less stressful. Act now and you can take advantage of historically low mortgage rates and the government’s Help to Buy Scheme, which together are making homeownership more affordable to a whole generation of first-time buyers.
You can download our full guide to the Help to Buy scheme here.