The growing appeal of New Build

The phrase 'don't judge a book by its cover' has a multitude of meanings. It stands to reason that the more appealing the packaging, the more enticing the commodity becomes. This is why branding and design plays such a huge part in attracting consumers to make impulse purchases. And this swift decision-making process is apparent across a range of price-tags.

Related topics:  Special Features
Craig Calder | Director of Mortgages at Barclays
23rd March 2016
Craig Calder Barclays

Research from Barclays Mortgages recently revealed that the majority of house-hunters take just ten seconds to decide whether they like a property from the outside, as one in six Brits admit to snap decision making. It added that over a third (35 per cent) of property buyers made their decisions purely on a home’s exterior and wouldn’t even venture inside if they were unimpressed. This came after over half (53 per cent) admitted they would buy a property that looked appealing on the outside, even if the interior needed extensive redecoration.

In addition the research outlined that almost half (44 per cent) of homebuyers would take up to 20 per cent off a property’s asking price if an exterior was not appealing, with homes in London losing as much as £107,400 in re-sell value. On average the UK loses £57,600 on each home sold because of an unkempt exterior, leaving buyers with far more bargaining power and sellers out of pocket.

In an age where we can swiftly search and view property online, it’s clear that kerb appeal and appearance within its marketing material is vital in generating both initial interest and helping to boost a property’s financial value. Even small details can have a lasting impact within a buyers mind in a short space of time; something that really underlines the fact that image can be everything to many people.

In terms of style, new builds have been named the nation’s favourite property type with over a third (36 per cent) of people choosing this property style as their preference. Other popular choices include Victorian houses (29 per cent) and Georgian houses (27 per cent). As a nation, we’ve fallen out of love with uninspiring 80s homes and Mock Tudor properties with just 8 per cent and 9 per cent of home seekers choosing these options.

This demand for new build is leading to some buyers paying a significant premium for such properties. According to further research from residential investment consultancy London Central Portfolio, buyers were said to be paying a 20 per cent premium on new units in certain areas of the capital. It found that in prime central London the average square foot price for a new build stands at £1,701, compared with £1,418 for an older property. Inner London is also reported to be impacted by the proliferation of high value new build schemes which are sold at a "significant premium to true market value".

The new build sector is an interesting one, especially amidst some conflicting reports over how the new stamp duty surcharge on buy-to-let properties and second homes could affect property prices moving forward. Initiatives such as the London Help-to-Buy scheme are a positive step forward. The emergence of a greater number of regional development pockets are also helping to create more projects for smaller to medium-sized developers. With this additional activity comes the potential for intermediaries to tap into supplementary lead generation avenues. Aligning with such developers or the independent estate agents handling the sales element of the particular project could help generate further opportunities and a new client bank.

As demand for new build rises, increased appetite amongst lenders is emerging to bolster propositions and support services to help meet a range of borrowing requirements. And with lenders looking to build closer relationships and alliances with the intermediary community, opportunities will continue to present themselves to ensure that this is a sector worth keeping a close eye on as the year progresses.

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