New build is evolving quickly - the market must be ready

A number of significant policy changes have already been implemented by Labour to support new build housing developments, and the landscape of this sector is changing quickly.

The National Planning Policy Framework (NPPF) has been updated to facilitate the government's plans, including changes such as the reintroduction of mandatory housing targets for local authorities, encouraging the development of brownfield sites over greenbelt, and the consideration of building in grey belt areas.

At e.surv we are already seeing a growth in the demand for new build services, and as the market continues to evolve, the need for reliable data and insight into the new build market will become even more essential in understanding lenders’ exposure risks and the growing issues around construction types, warranties, service and estate rent charges, and incentives.

While the new policy changes put the focus on the development of brownfield, greyfield and greenfield sites, which are essential for addressing the housing shortage, this does present potential issues for lenders that will become even more prevalent as the market grows.

Areas of concern include greybelt sites that have previously been used for industrial or commercial purposes may be contaminated with hazardous materials and can present environmental and potential liabilities for developers and, in turn, pose a higher risk for lenders.

Remediation costs for these sites can be significant and lead to lengthy delays that ultimately jeopardize the financial viability of the development.

Lenders need to get ahead of this and be informed so that they can ensure that any site has been properly assessed, with a remediation plan in place so that they can accurately calculate the risks involved upfront rather than encountering them later down the line. It will be important when considering applications in the future. Delays and uncertainty are a particular ‘bête noire’ of brokers and borrowers alike.

It is equally vital that any decisions made concerning greybelt developments are supported with insights that can identify any issues before they become a problem.

Repurposing greyfield sites can often be more complex and costly than developing from scratch due to the significant structural alterations involved and the infrastructure upgrades that may be needed. 

Unexpected issues that could arise from high development costs, delays in planning permissions, and the possibility of affordable housing potentially reducing profitability are all considerations that will become more prevalent as the new-build sector grows.

In addition to this, we are also seeing a notable increase in the use of Modern Methods of Construction.

At e.surv, we understand that all of these things pose significant risks to lenders, and it is more important than ever that they have access to real-time new build data and information.

Our interactive web-based new build portal allows lenders to track their lending volumes and concentration risk across over 16,000 new-build developments.

Importantly for brokers and borrowers, following the launch of our digital valuation for new build property, which delivers a same-day completion for some new build valuations, we are now reducing the application to offer time for new build mortgage applications.

Our dedicated new build team offers a full range of new build valuation services to facilitate better informed and more efficient decision making and we are continuing our investment in the technology, data and our team to deliver more to support our clients in this rapidly changing sector.