Housebuilder giant Barratt has revealed that their new build sales have jumped by a fifth since July, compared with the same three-month period last year. This increase reflects the general upward trend being felt across the housing industry at large, with record numbers of mortgage applications and house prices at a high.
Barratt has reported 4,032 completed sales between July 1 and October 11, which is up by 24% from 3,252 sales during the same period in 2019. The number of forward sales also saw a sharp increase of over 2,000 sales, reaching 15,135 homes with a total value of £3.6bn. These figures seem to be a clear indicator that demand from prospective buyers is still very present.
There are several factors that could be driving this demand, including the backlog of sales that built-up during the national lockdown and the stamp duty holiday running until March 2021. However, when explaining the surge in sales, Barratt pointed to the reduced number of high LTV mortgages available: “since the pandemic there has been a material change in loan to value (LTV) lending criteria with no mainstream mortgage lenders providing mortgages at 95% LTV for new-build homebuyers, increasing the reliance of first-time buyers on Help to Buy”.
The suggestion that more people are turning to Help to Buy, can be seen through the figures in the firm’s report. The percentage of new builds reserved for Help to Buy applicants has increased from 45% in 2019 to 51% this year. And 74% of these borrowers are first-time buyers, compared with 70% last year, revealing a 4% increase. If lenders don’t return to the high LTV market soon, the new build sector could see more and more buyers turn to help to buy instead.
This uptake in sales could indicate renewed energy in the new build sector, which would be welcome news after the challenges of the past year. However, Barratt, along with most of the country, remains wary of the consequences another national lockdown could have on construction, the housing market and the country as a whole. Regardless of what the future may hold, it seems there are plenty of opportunities to make the most of now.