The Budget is imminent and there are rumours the government will try and win over first-time buyers and home-owners with some incentives for the home-moving market. The new build market remains popular not least because homes tend to be more energy efficient, and energy performance matters when it costs so much to run a home. Maintenance costs for new build are less too as a rule and the absence of a chain remains a compelling feature for buyers. As inflation has abated and rates have fallen, buyer confidence is reportedly returning as it has to much of the secondary market too. But we should not mistake improved confidence for ’everything is alright.’ Whether a shot in the arm is exactly what we need is a moot point because in an election year we are unlikely to get anything else that resembles long-term or possibly unpopular planning when votes are stake. If there is nothing then we will continue as we are but it seems unlikely. 99% mortgages and stamp duty holidays are rumours doing the rounds. Help to Buy, so beloved of developers and lenders, will unlikely return but never say never… Something needs to be done to get more new homes built. Developers rarely elicit sympathy but their lot is not an easy one and, as far as house building goes, residential developers are the only game in town. Costs of materials and labour are up for all the well documented reasons we know but in addition new legislation presents new challenges. Biodiversity Net Gain is one example. Planning authorization for all Town and Country Planning Act developments have to deliver a minimum 10% net gain in biodiversity, compared to pre-development levels. Developers will need to eliminate or reduce biodiversity impacts by choosing sites more carefully, modifying development plans or improving and restoring biodiversity on-site. No small task but if it is not possible on-site they can look to compensate through off-site endeavours or they can, like the carbon offset scheme, purchase biodiversity credits from the UK Government. This is all additional cost which will undoubtedly be passed onto the buyer. Some years ago, the Department for Environmental, Food and Rural Affairs estimated that biodiversity units would cost between £9,000 and £15,000 per unit . It’s likely much more than that now. Developers have warned that the demands could paralyse the new build market. For new build then stimulus may be appropriate. Our own Property Watch survey underlined the issues in the new build market. Surveyors reported a market with a third selling below asking price and longer sales cycles. This has meant a heavy reliance on buyer incentives, with around 60% of new homes relying on them to attract and retain buyers, often addressing upfront cost concerns. Over a quarter of respondents (25.7%) said they had seen a rise in the use of deposit contribution incentives, followed by payment of legal fees (18%) and Stamp Duty (17.7%). The housing market may be picking up but the new build market is not in rude health. Whatever we see next month, it will unlikely be strategic in the sense of housing policy but almost certainly be politically expedient.

James Ginley, Technical Surveying Director, e.surv Chartered Surveyors