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5 things you may not know about the UK's new build homes -  #NHW17

Posted 15 May 2017 by Keith Osborne

We start New Homes Week by taking a look at a few facts from the new homes sector that house-hunters may not know...

In recent years, the UK’s housebuilding industry has been in the national new headlines regularly, demonstrating how important the issue is to our country, but what does a house-hunter know about the new build homes we’re making and how they relate to the UK property market as a whole?

With New Homes Week starting today, here we look at a few related topics to pick out some things you may not be aware of about new homes in Britain:

1. Are we building enough new homes?

The short answer is ‘No’ but let’s look a little deeper…

The team at Full Fact looked closely into the UK housebuilding industry at the end of April 2017 in a bid to find out exactly how many homes are being built in this country annually.

Housebuilding numbers are increasing, but are still below those before the recession brought on by the global economic crisis of the previous decade. As we worked out of that, statistics suggested the lowest peacetime building rate since the 1920s, though there is some confusion as to the accuracy of the numbers recorded then and even today.

Some of the latest figures show 164,000 homes completed over a year 2015/16, though this is for England only and compares to records showing 142,000 started over that period. Other records look at the United Kingdom as a whole, with 172,000 started over 2015/16 and 168,000 completed.

The UK’s major political parties are aiming for anywhere between 200,000 and 300,000 new homes a year to be built in order to keep up with demand. One University of Cambridge expert suggested 170,000 private sale homes and 75,000 units of social housing needed to be created per year to stay on track with demand.

In addition to giving local councils the authority to borrow money to build their own collections of homes, there are also calls for builders across the industry to embrace newer technology, for example modular housing, that can potential reduce the time taken to create and finish new homes, increasing potential annual capacity considerably.

2. Price savings, new versus old properties

Some new homes may seem a little expensive against a comparable re-sale property, but what is ‘comparable’ really and what are you paying for that you might not get in the second-hand home?

The Home Builders Federation has recently published a new report titled ‘Why buy new: avoid the money pit’, where its research showed over a third of homebuyers made home improvements valued £10,000 to £40,000 on their recently purchased home, and that the average three-bedroom semi-detached re-sale property might need over £50,000 of improvements to meet the latest building standards.

From basic, dated work such as dodgy wiring and crumbling plaster to a high-quality kitchen and energy-efficient windows and heating, this extra work starts to make the price of a new build equivalent – all covered by a warranty of at least 10 years – much better value. 

3. Hundreds of pounds saved in running costs 

Redrow Homes – a national housebuilder that has consistently been acclaimed by the independent judges of the WhatHouse? Awards – has undertaken research that shows some remarkable year-on-year savings in the running costs of new homes compared to their older neighbours.

No matter what size the home, the latest standards on construction, insulation and energy efficiency mean that homeowners in new build homes can save hundreds of pounds every year compared to those living in period buildings.

The Redrow research showed a saving of £1,300 annually in the running costs of one of its new four-bedroom detached homes compared to a Victorian equivalent, with a brand new three-bedroom semi saving £915 per year on a comparable re-sale home and a two-bedroom new build costing over £700 less to run than its older peer.

Rob Macdiarmid, group sustainability director for Redrow Homes, says: “Energy prices are never far from the headlines and environmental considerations are increasingly high on most homebuyers’ agenda so a brand new home ticks lots of the boxes not associated with the purchase of an older property. In fact, we recently surveyed prospective new homebuyers and they told us that lower energy bills were actually more important to them than a garden, parking space, amenities, external appeal/design of home, and fittings and appliances.”

4. Innovation and flexibility of incentives to purchase new homes

Housebuilders themselves have created a number of initiatives to help buyers of their new build homes:

  • Part Exchange, where the purchaser’s old home is taken as an effective part payment against the new property, and the purchaser doesn’t have to pay estate agents’ fees or risk a collapsing property chain.
  • Liaising with estate agents, with a number of the major housebuilder’s taking the responsibility of negotiating with the agents on behalf of their clients who are trying to sell an existing property. Some of these schemes end with a Part Exchange if a suitable buyer at an acceptable prices isn’t found after a fixed period of time.
  • Stamp duty and legal fee payments, as housebuilders try to take care of some of the other major expenses relating to buying a home on behalf of the buyer.

Governments have also created schemes to provide financial assistance to many, with much emphasis on the new homes industry. The Help to Buy Equity Loan scheme is available to almost buyers and requires a small deposit from them (5%) as well as providing an equity loan that is interest-free for five years. This scheme has different criteria for schemes in Wales, Scotland, London and the rest of England. Shared Ownership offers first-time buyers a ‘part-buy/part-rent’ option on some homes, requiring a small deposit and subsidised rent on the part not owned. A Starter Home Initiative is also under way to provide buyers aged up to 40 a discount on their first home, with specially marketed new build homes to suit them planned across the country.

5. Are new homes worth it?

The Home Builders Federation publishes its customer satisfaction survey results every spring (the latest this March) which shows the results of a voluntary survey from buyers of new homes from its members, which account for 80% of all new build properties built in the UK.

The survey asks a series of questions of buyers about how happy they are with their property in terms of quality of design and finish, practical matters such as storage and the quality of customer service provided by the housebuilder throughout the buying process. Some 84% of respondents were satisfied, and the organisation’s executive chairman, Stewart Baseley, recognises the room for improvement as well as the high level of current success.

He says: “These results clearly demonstrate that consumers are overwhelmingly happy with the service and product that house builders are delivering. However, clearly there are instances when the industry does not get it right and recognises the need to do better. As output increases the industry faces a huge challenge to ensure it maintains and improves its track record on customer service and build quality. Housebuilders remain committed to delivering the high quality product our customers quite rightly expect, and responding appropriately when issues arise. The vast majority of customers are already happy with the service and quality of their home but the industry is determined to deliver even higher levels in the years to come.”


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