The increasing demand for new-build properties

March 29, 2023

Homebuyers and property investors who are increasingly seeing the value in new-builds are finding there’s more choice in regional areas.

While Greater London recorded the most new-build sales in 2022, other areas are seeing strong growth in the new-build space. Developers and investors of new homes are experiencing increased interest and success in thriving regional areas, particularly in the North of England and Midlands.

Greater Manchester and West Yorkshire led the way for the north with total new-build transactions in 2022. Both areas came close to reaching the might of London's new home sector.

This is according to research by Alliance Fund, where the end-to-end real estate fund analysed the level of property transactions to have completed in each county over the past year and what proportion of these came through the new-build market.

Alliance Fund’s CEO Iain Crawford commented on the findings: “This appetite for new-build properties presents developers with an abundance of opportunity when it comes to where they choose to build, and while London will no doubt remain a consideration, it’s certainly not the only area of focus.”

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The importance of higher energy efficiency

Energy costs have been one of the most talked about elements impacting the UK property market. Coming with a number of benefits and incentives for landlords, new-build properties tend to have the highest energy efficiency ratings, which provides cheaper energy bills and environmental benefits.

Energy efficiency is something that property investors cannot afford to ignore any longer when making decisions on their investments. And for those operating in the buy-to-let sector, top energy efficiency has become a must-have, particularly for those investing with the long term in mind.

Tenants are more aware than ever of their regular outgoings and particularly when it comes to energy bills. Currently, tenants are even more concerned about energy costs than rising rent.

Over 1,000 renters were surveyed by Finbri, a bridging loan broker, to understand how the cost-of-living crisis is impacting them. The results of the survey revealed that, while the cost of rent is still a primary concern, 35% are more worried about their energy bills.

This further shows the benefits of investing in new-builds with higher energy efficiency. Investing in these types of properties could cause your buy-to-lets to be in higher demand.

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Homebuyer and investor appetite increasing

With spring officially here, the UK property market as a whole has picked up pace. The number of property transactions has increased, and rental properties remain in high demand.

While the base interest rate was recently increased to 4.25% by the Bank of England, fixed-rate mortgages are continuing to fall as calm returns to the lending sector. This has given buyers and investors more certainty and confidence.

At the same time, stability has returned to the property sector after subdued levels of activity at the end of 2022 and beginning of 2023. But both buyer and investor appetite are gaining momentum as it’s expected to be a busy spring and summer for the housing market.

These trends could also cause the new-build market to speed up as well, particularly as new homes have been an important part of property sector activity in the past year. Across England, around 11,608 new homes were sold last year, and this accounted for 2.1% of total market transactions.

If you’re interested in investing in a new-build property or want to learn more about the investment opportunities we have available at The Prestbury Advisory, get in touch with our team by calling us at 01625 725 779, or email us at contact@theprestburyadvisory.com.