Lee Martin, Head of UK for Unlatch, the new homes sales progression and aftercare platform for developers and housebuilders, provides his thoughts on what we should and could expect from the new homes property sector and reality of 2023. With 2022 coming to a close, the UK finds itself under somewhat of a financial dark cloud. Some are calling it a recession, most believe it to be the obvious symptoms to many factors currently being experienced on a global front, not just within the UK.  This is coupled of course with a cost-of-living crisis. According to Halifax’s House Price Index, since the UK entered this difficult economic stage, the average house price fell by 0.4%. On top of this, in the last quarter of 2022, the Bank of England raised interest rates from 2.25% to 3.0%, and again to 3.5% in December, triggering a low number of mortgage approvals and sellers accepting 3% below the asking prices on their homes. Against this backdrop, estate agents Savills and Knight Frank expect house prices to drop by 10% and 5% respectively in 2023. Economic experts Capital Economics are forecasting that in quarter four house prices will be 8.5% lower than they were in Q4 2022. However, is it all doom and gloom? I personally think not!  Let us not forget, since Covid we have seen unprecedented buoyancy in the market, and thus it has become a seller’s environment, pushing prices to ever higher false premiums. Seeing prices coming down does not mean they are dropping, but levelling out to where they should have and would have been. A 5% fall in house prices next year would see most of the market’s current over-valuation reversed by December 2023. Mortgages are slowly becoming more favourable week on week, people will always have a reason to move, be that due to having children, those children getting older and that means the need for more space. Divorce often pushes people to have to sell and buy, FTB’s wanting to get on the ladder (often with help from Bank of Mum & Dad), and even, and not to sound morbid; death of a partner.   The costs to rent are rising, where many would prefer to invest in something tangible rather than paying off someone’s mortgage, yet for those who can’t scrape a deposit together, there will always be investors snapping up properties to let, and with a thriving new homes market, buying is simplified and made more affordable through more energy efficient living, and availability in stock or off plan plots. New Homes will always turn on its survival mode in a harder market, regardless of the climate as there are many tools able to be used to help broker a deal, where in contrast, the Jones family selling their 4 bedroom semi on Pennywell Avenue in Uxbridge are not able to offer such incentives. These negotiating tools can consist of, for example, stamp duty paid, mortgage payments for a specific timeframe, discounts on the property in question, utility bills or service charges paid for a limited time, government schemes such as the old HTB and Shared Ownership, along with the fact that developers will often have to sell, so there is a will to achieve the end result rather than if vendor on an established property may decide against selling if they do not achieve the price they require to move on themselves. And of course, with PropTech firmly on the scene, more so for the new homes industry, we will continue to see an even better, more improved transparency between developer and purchaser. Never underestimate the glory in a quality buyer experience and customer journey, something we here at Unlatch saw a long time ago when we created our white labelled Purchaser Portal, and branded app.   Added to this, our new E-Commerce module, allowing people to purchase in real time, regardless of location or time zone, allowing those overseas purchasers to continue their spending and taking advantage of the climate and exchange rates, where buyers from around the world have continued to purchase at high and consistent levels over the last 6 months where more localised buyers have of course slowed down, mainly due to being stretched on their mortgage rates and repayments. To conclude, a rapid reversal in mortgage rates would have the greatest impact on buying power, enabling buyers to borrow for their next move without over-stretching themselves. However, it is important to mention that those who had not started their new home journey until now would not have known or felt the strain of how much more they now must pay monthly on their mortgages. A far contrast to those who were already on the search, now feeling the obvious and blatant difference and ‘pinch’ which could be off putting; which is where I use the analogy of the old Saturday evening television series Bullseye; “here’s what you could have won”, and we are not talking about a caravan or a speedboat. If a modest decline in house prices took place, that desire to buy could be further accelerated. Clients of Unlatch, along with new prospects are happy to invest into the tools we offer, from SME to National developers and housebuilders, which should give confidence to many that property is still and likely to always be the safest investment or asset to turn to… I would always rather have a home than crypto currency personally, but perhaps that reasoning is simply because I understand the property market, and have seen a couple of blips in the market in my 23 years of working within the industry… what goes up must come down… until it goes up again. Building, Design and Construction Magazine | The Choice of Industry Professionals

A nationwide insulation funding scheme aimed at middle income householders living in energy inefficient properties has been welcomed by insulation specialist Actis. The £1 billion ECO+ scheme, which launches in the spring and will run for up to three years, builds on the existing ECO (Energy Company Obligation) schemes, which have been running since 2013. Actis UK and Ireland sales director Mark Cooper welcomed the move, which covers home owners not eligible for the existing funding, whose target audience is people on benefits or in fuel poverty. “More than 25% of the UK’s traditional housing stock is more than a century old, much of it very leaky when it comes to keeping heat in,” he said. “Research shows that more than 12 million homes had EPCs of D or worse in 2020. In fact, we have some of the least energy efficient housing stock in Europe. Installing insulation is the most cost-effective way of stemming the flow of heat escaping from these homes. “With energy prices affecting everyone, not to mention the impact on the environment, it makes sense to ensure that the existing building fabric is as energy efficient as possible. Hopefully this new scheme will encourage people who have been considering improving the energy efficiency of their homes to go for it.” The original ECO schemes have so far seen energy efficiency measures installed in 2.4 million homes nationwide. The new initiative is aimed at those whose homes are in council tax bands A to D in England, A to E in Scotland and A to C in Wales – and which have EPC (Energy Performance Certificate) ratings of D or lower. Eligible households will be able to receive grants of up to £1,500 for insulation, which the government estimates will save them around £310 a year on their heating bills. Details are yet to be announced, and householders are being advised to contact their local council or energy supplier to find out whether they are participating.  The news follows an announcement in the autumn statement that the government is to invest an additional £6bn between 2025 and 2028 to support its ‘energy demand reduction target’ to reduce demand by 15% by 2030. Building, Design and Construction Magazine | The Choice of Industry Professionals