How can brokers get involved with the New Build market? Interview with James O’Reilly, Corporate Account Manager
In the first of our new series exploring the opportunities available to brokers in the New Build sector, we speak to James O’Reilly, our Corporate Account Manager, as he shares his thoughts on the current market and how brokers can take advantage of New Build business.
So James, tell me a bit more about your role at Leeds Building Society?
I am a Corporate Account Manager, working mainly in the New Build sector. At Leeds Building Society we operate in many niche areas of the market that are linked to New Build properties, including Shared Ownership and Help to Buy. This means we’re in a great position to work with New Build firms to offer support and guidance, as well as offering a wide range of products for brokers’ customers.
What are your thoughts on the current state of the New Build market?
There are well-documented issues within the housing market at the moment, with an estimated 250,000 homes needed to be built every year to meet growing demand. To combat this the Government is encouraging housebuilders to build, build, build and this has led to more New Build homes coming onto the market than ever before, with developers having little trouble selling them. This, as well as the fuel of Government mandated schemes such as Help to Buy and the Starter Homes initiative, means the New Build market is coming into an exciting growth period, one that brokers can take advantage of.
What should a broker wanting to advise on New Build be aware of?
There is actually only a small section of the intermediary market that regularly deal with New Builds, and the large majority of these will have special relationships with builders. The builder, depending on its size, will often have a panel of trusted brokers that they recommend to their customers, as they know these brokers have the knowledge of the market and understanding of the constraints of New Build properties to see a case through to conclusion smoothly. While there is nothing stopping a customer from going elsewhere, the process involved in purchasing a New Build home means that many will often take the path of least resistance by using the broker recommended by their builder. One of the barriers for brokers looking to attract this sort of business is therefore securing a relationship with a builder who will then recommend them to their customers.
What challenges might brokers face in a New Build case?
One of the main challenges that brokers might experience in their New Build cases is timing – unlike existing properties, builders often set a limit on the time from reservation to mortgage offer, usually giving brokers 28 days to get a case through. New Build brokers have usually developed their model to process cases as fast as possible, so adjusting a business’s existing processes to meet time constraints could present a further challenge.
Another challenge is the sheer volume of cases brokers can have to get through. With demand for housing at a peak, builders can often be selling homes rapidly, which can cause logistical issues for the brokers looking to submit mortgage applications. The afore-mentioned changes to the broker model are often required to avoid a back log of cases and a strained relationship with the builder.
How do you see the market changing in the future?
I don’t expect to see the New Build market tailing off for a while, especially with the extension of Help to Buy until 2020, changes to Shared Ownership rules and the Starter Homes initiatives coming into effect. As house building increases there will be plenty of opportunities for brokers to benefit from the growing numbers of buyers looking to purchase a New Build property.
While issues such as skills shortages in the construction industry could put a brake on increasing output to the levels needed to solve the housing shortage, with housing a hot topic on the political agenda, growth in the New Build market is showing no signs of slowing down, and there should be opportunities for brokers who want to make the most of them.
Look out for future blogs in the series exploring New Build in the coming weeks, or to speak to one of our team about general enquiries or specific cases, call 03450 50 5555. We may monitor and/or record your telephone conversations with the Society to ensure consistent service levels (including colleague training).