The past six months have brought mixed results across the market for everyone, with fluctuations in rates, shifting buyer preferences and economic uncertainty.

Despite the changes, sales have remained stable, defying some expectations. And, regardless of a fall in new-home registrations, we’ve seen steady performance in the new-build market.

This slowing of registrations can be attributed to many things but, most notably, economic conditions have made homebuying an affordability stretch for customers, and the withdrawal of schemes such as Help to Buy certainly hasn’t helped.

To build for the future, look beyond the immediate

Despite decreases across the industry, in the first quarter of 2023 our market share rose. We are engaging successfully with our existing builders and experiencing increased sales conversions. This is all positive amid a downturn.

Market dynamics

As the sector moves forward, close attention to market dynamics and government policies will be crucial if industry stakeholders are to navigate the evolving landscape successfully.

In addition, we are witnessing a rise in acquisitions and mergers among builders, driven by the need to address profit margin challenges. Private equity funding has become a prevalent method of supporting expansion and facilitating the acquisition of other builders.

Despite all the changes, sales have remained stable

We know the market will continue to price in further interest rate hikes throughout 2023. There have been predictions that the base rate will rise to 5.4% by the end of the year, before slowly falling over the next five years, with a goal of about 3.6%.

It’s impossible to talk about the future of homeownership without mentioning affordability concerns. This continues to be a pressing issue, particularly for first-time buyers. Ultimately, we need more government support for this sector.

Some of the most beneficial steps would be further innovation and the expansion of green spaces.

The use of energy performance certificate data capture, as seen in some of the UK’s major banks, is commendable because it allows for the collection of valuable information.

The more we embrace the mindset of growth, reassurance and resilience, the more we can make the best of what we have

Hopefully, this initiative will inspire other lenders to prioritise sustainability and contribute to the growth of the green sector.

With elections upcoming — no matter the results — we’d like to see more government support in this endeavour too. Many builders face significant challenges and this trend is likely to continue for the next few months, with narrowing profit margins and new regulations coming to the fore.

For consumers struggling with mortgage payments, chancellor Jeremy Hunt has announced a few support measures. These include the opportunity to discuss their options with their bank or lender without risking a negative impact on their credit score. Lenders have also committed to implementing a waiting period of 12 months before initiating any repossessions.

The use of energy performance certificate data capture, as seen in some of the UK’s major banks, is commendable

These measures are certainly beneficial for those struggling to make their mortgage payments, but Hunt has noted that there is currently no direct government support for mortgage holders because any moves to alleviate strain could contribute to inflation.

Resilience amid uncertainty

We have shown that as an industry we are capable of weathering the storm, and we can take any challenges in our path and convert them into something positive, whether in mindset or messaging.

We are engaging successfully with our existing builders and experiencing increased sales conversions

Building for the future is about looking beyond the immediate and, while our current market is challenging, there is positivity on the horizon. The more we embrace the mindset of growth, reassurance and resilience, the more we can make the best of what we have.

Mobeen Akram is national new homes account director at Mortgage Advice Bureau

This article featured in the July/August 2023 edition of MS.

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