The positive news across the housing sector has continued unabated in recent weeks, and the buoyant mood appears set to continue as new figures from the National House Building Council show that the level of new properties being registered across the UK is at the highest level since the credit crunch.
Building firms have clamoured for an increase in activity, and have been particularly supportive of the Government Help to Buy initiative, as this has certainly helped to stimulate interest in the market. However, levels are still below the last previous highest peak from 2007, when over 200,000 new properties were registered with the NHBC.
Of particular interest to contractors is that home building in the capital has been consistently on the increase, as the NHBC noted that 26,230 new plots were ready for developing in 2013. This figure states a 60 per cent increase on the numbers registered for 2012, and is the highest it has been for over 20 years. And the growth was not just isolated to London and the ever popular South-East, as every region of the UK, bar Wales, saw large increases from the previous 12 month period.
The chief executive for NHBC, Mike Quinton noted that: “Looking back at 2013 it is very clear that it has been the best in a number of years for the sector as a whole, across the entire country. Over the year, we have seen a genuine return of confidence to the industry as builders strive to meet the growing demand for new homes that the UK clearly needs. Government initiatives such as Help to Buy have also contributed.”
In addition, Quinton pointed out that more and more would-be buyers are struggling to get onto the market for the first time: “The UK still has a chronic shortage of new homes, with an unprecedented number of young people still living at home and unable to get on the housing ladder.”
Although the availability of new stock has been cited as the main concern for the home buying sector, the good news for contractors is that lenders are not yet looking to make whole sale increase to interest rates. Over the past 6 months, several more banks have begun to offer mortgages to contractors via both stages of the Help to Buy scheme, as Natwest, Virgin & Nationwide have now joined Halifax in offering options for buyers.
Simon Butler, of Contractor Mortgages Made Easy said, “There were wide-spread calls just over two weeks ago for interest rate increases, after the national employment figures edged closer to the Bank of England’s target of 7%, but it appears that banks are not currently looking to use this as the time to raise rates. In fact, many lenders have been decreasing their current product range in certain areas.
However, Butler did warn that this trend would reach its apex in the near future: “While rates are still at historically low levels, it has become increasingly clear that this is the best possible chance to secure a long term fixed option. Once rates do increase, these will be the first options to be raised. There are some very tempting two year fixed rates on the market at the moment, but it would be wise to consider that the eventual increase to the bank base rate over the next 12-24 months will likely mean that most borrower face a higher margin to re-fix at the end of their current term.”
Article By: Jon Shields, Media Executive at Contractor Mortgages Made Easy
Media Contact: Raman Kaur, Public Relations Manager
Tel: 01489 555 080