Our market context

Part of a larger market

There are generally in excess of one million housing transactions per year in the UK, with new homes accounting for between 15-20% of total completions in a normal year.

This means we are part of a larger market and prices of new homes are closely aligned to second hand homes of a similar size and location. 

Taylor Wimpey development

Interest rates and mortgage availability

Interest rates and mortgage availability determine housing affordability and accessibility for our customers. Interest rates are at an historic low and for customers able to access the housing market currently, servicing mortgage payments is, on average, cheaper than renting (source: Bank of England, Nationwide).

At 7.7 times median income for England and Wales in 2019 (source: ONS), the house prices to earnings multiple remains high. Stricter rules on mortgage lending were introduced in 2014, aimed at ensuring customers will be able to meet their mortgage payments if interest rates increase.

Employment

The UK employment rate has implications on the number of customers able and willing to buy new houses. A healthy employment outlook is important for general consumer confidence in the housing market and the wider economy. In previous cycles, higher unemployment has been a contributory factor to a weaker housing market.

Help to Buy

Help to Buy has been popular with our customers, supporting them to get onto the housing ladder and in moving up the housing ladder. Under the current scheme the Government will lend up to 20% of the value of a new build home (40% within Greater London) via an equity loan (interest free for five years) to homebuyers able to meet certain criteria, including raising a 5% deposit. The next phase of the scheme began in April 2021, limited to first time buyers and has introduced regional maximum price caps with the scheme due to end 31 March 2023. We believe that the changes announced are appropriate and are in the best long term interests of the housing market and homebuyers.

Climate change / regulation

The Future Homes Standard outlines new regulations aimed at making new homes more energy-efficient. Part L relates to the conservation of fuel and power, and Part F covers ventilation.

We are also awaiting the outcome of the Government’s EV (electric vehicle) charging regulations consultation, which could have important implications in relation to charging points on developments, which may raise potential issues regarding the overall capacity of the grid to serve future developments.

Land and planning

We also await the final outcomes of consultations on the Government’s land and planning proposals. The Government is assessing the planning system, with the aim of streamlining processes and ensuring each area has a local plan.

 

Links

UK House Price Index - Office for National Statistics (ons.gov.uk)
Statistics at MHCLG - Ministry of Housing, Communities & Local Government - GOV.UK (www.gov.uk)
House Price Index Headlines | Nationwide