As we enter the new fiscal year, we should prepare for a period of stability in the new construction market, not the boom of activities.
With fewer units expected, but competition among developers is hotter than ever, the focus must shift to how brokers can maximize their opportunities for potential clients.
Typically, a mortgage broker converts one into a reservation in every four new builds, but what happens to the other three? By putting these customers aside, we missed other lead generation opportunities, and this is the pipeline we need to make the most of.
Cultivating potential customers is essential
By gaining a deeper understanding of these clients’ initial inquiries, we can discover their specific challenges and aspirations, providing them with tailored solutions that can help turn their homeownership dreams into reality.
Reasons for optimism
According to the latest housing pipeline report from the Home Builders Federation, more buyers need to be brought into the new construction market as a backdrop, with 2024 marking the lowest level of new home approval in a decade.
Additionally, 17,000 affordable homes remained stagnant due to the existing Article 106 agreement, further affecting the pace of new buildings.
We want to influence developers and lenders’ innovation
Now that there are several lenders that enable customers to exceed the standard 4.5 times the revenue, everyone’s eyes are still on the high LTV landscape, we’ll breathe and wait to see what the financial behavior authorities’ comments come from this summer.
Despite these figures, the increase in lender cooperation has brought a sense of optimism. We finally see a real shift as lenders offer more innovative products (such as low exclusion solutions) and more flexible standards, consider additional revenue sources, and ignore small credit issues in direct cases.
The key group of people
Current potential first-time buyers are still the key group we are going to get involved, and there are more renters than ever before.
In fact, studies show that one in three (33%) of first-time buyers think it’s a good time to buy a property, almost twice the number a year ago.
By staying proactive, we can turn more prospects into prospects
But about two-thirds of aspiring buyers believe that the biggest obstacle to home ownership is the affordability of monthly mortgage repayments and building deposits, an analysis by the Construction Society found. This is how the value of a new builder is integrated into his own value, revealing the myth surrounding home ownership to enable more buyers to enter the real estate ladder.
Many hats
A newly-built broker wears many hats, which is the hat between clients and developers.
We position ourselves as problem solvers, identify the right financial path to ensure that the right customer situation is right, and browse the financial complexity that facilitates purchases. Incentives are key to doing so, depending on what we influence developers and lenders to innovate, thus giving our customers more choices than ever before.
Despite the numbers, there is still an optimistic feeling in the increase in lender cooperation
With that in mind, we should encourage more developers and lenders to participate in the latest market innovations that support aspiring first-time home buyers, as recent product launches have seen considerable absorption specifically for their needs and pain points.
It must be a year for buyers to educate, making sure everyone knows about evolving solutions and often significant standards changes that can be key to transitioning from rent to home ownership. Creating leads is absolutely crucial to achieving this goal, and understanding that every client you encounter has the same end goal – albeit on a different schedule.
The focus must shift to how brokers maximize opportunities with potential clients
It is crucial to build constant relationships with potential customers who are not ready to move forward on their home buying journey. Continuous communication will help change their mindset to realize that they can become homeowners earlier than they thought.
By staying proactive and constantly providing them with relevant solutions that are aligned with their specific needs, we can turn more prospects into leads and bring more people into new markets.
Felicity Barnett is lender operations manager for the Mortgage Advisory Bureau
This article is in the May 2025 version Mortgage Strategy.
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