The potential for new towns to meet aspirations for home ownership is evident as research shows nearly three quarters of prospective FTBs would consider buying in one.
Despite this, more work needs to be done to increase the appeal of new towns among all buyer types, and tackle associations with being “concrete” and “having low quality housing.”
Demand for homes in new towns would be enhanced by measures addressing wider barriers to moving amongst various groups, such as affordability and moving costs for FTBs or for downsizers, availability of properties that meet their requirements.
Santander UK urges for ‘new town’ incentives to be strengthened as it supports buyers with 95% Loan-to-Value (LTV) mortgages, helping them seize opportunities in the changing housing market.
As the UK Government embarks on its largest housebuilding programme in over half a century —aiming to deliver 1.5 million homes in the next five years—new research from Santander UK shows almost three quarters (73%) of potential first-time buyers (FTB) would consider moving to New Towns. This compares to 57% of those anticipating moving from their first owned property and 41% of those looking to downsize later in life.
While a successfully implemented new towns initiative could revolutionise home ownership for millions, the research shows the appeal of new towns needs to be strengthened in order to maximise their success. While a majority of prospective FTBs would consider moving to one, this includes 26% who say they would prefer to live in an existing town. A perception of lower quality housing may impact new towns in general: this was the most cited reason (25%) amongst the wider group of potential movers who did not express a preference for living in a new town. However, a number of factors would strengthen appeal amongst this group: around seven in 10 said excellent availability of healthcare facilities (73%) and access to green spaces (70%) would make them more likely to consider a new town. Interestingly, the survey showed that – in the mind of the public – this sense of green space is associated with ‘garden cities,’ whereas ‘new towns’ tended to evoke connotations of “concrete.”
Barriers and incentives to moving
Addressing wider barriers to buying, and moving, will also be paramount if the new towns initiative is to carry sway among potential homebuyers.
Affordability concerns were highlighted in the survey to be a major barrier to FTBs, regardless of their preferred destination, with 47% citing affordability as a major hurdle. This is followed by other costs associated with moving (38%). Santander’s findings also show that there is merit in understanding the real demand for extended fix mortgages as nearly a third (30%) of prospective and recent FTBs say this would be a welcome initiative to help combat issues of affordability.
Among prospective downsizers, the most commonly anticipated challenges include decluttering or reducing possessions (50%), the lack of suitable properties in desired locations (47%), and the affordability of homes they are interested in (39%). There is a case to be made for incentivising developers to build the types of homes downsizers actually want. Linked to this, a substantial share of recent and prospective downsizers (44%) feel incentivising developers to build homes meeting their specific needs would support them in moving home. Focus groups with downsizers highlighted a desire for spacious, well-connected communities that facilitate an active later life.
Graham Sellar, Head of Business Development – Mortgages, at Santander, said: “New towns have incredible potential, but to maximise the impact they can have, they must be built with the people who will call them home in mind.
“Our research shows just how important it is to create lively communities with green spaces as well as easy access to healthcare when it comes to appealing to more homebuyers – providing somewhere that people can think of as a ‘garden city’ than a ‘new town’.”
To support buyers looking to take advantage of opportunities in the growing housing market and purchase a new build property, Santander offers 95% Loan-to-Value (LTV) mortgages on new build houses and flats. Additionally, it offers discounted mortgage rates on properties with an EPC rating of A or B, which the majority of new build homes are.
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Notes to editors:
The survey was conducted by Global Counsel amongst a nationally representative sample of 4,011 respondents. Additional ‘boost’ responses were collected amongst key subgroups to allow for analysis of their experiences, views and preferences. Fieldwork was conducted using an online survey panel, between 6 and 11 September 2024. Prior to conducting the survey, a number of online one-to-one interviews and focus groups were conducted with downsizers and first-time buyers.
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. At 30 June 2024, the bank had around 19,600 employees and serves around 14 million active customers, including 7 million digital customers via a nationwide 444 branch network, telephone, mobile and online banking. Santander UK is subject to the full supervision of the FCA and the PRA in the UK. Santander UK plc customers’ eligible deposits are protected by the FSCS in the UK.
Banco Santander (SAN SM, STD US, BNC.LN) is a leading commercial bank, founded in 1857 and headquartered in Spain and one of the largest banks in the world by market capitalization. The group’s activities are consolidated into five global businesses: Retail & Commercial Banking, Digital Consumer Bank, Corporate & Investment Banking (CIB), Wealth Management & Insurance and Payments (PagoNxt and Cards). This operating model allows the bank to better leverage its unique combination of global scale and local leadership. Banco Santander aims to be the best open financial services platform providing services to individuals, SMEs, corporates, financial institutions and governments. The bank’s purpose is to help people and businesses prosper in a simple, personal and fair way. Banco Santander is building a more responsible bank and has made a number of commitments to support this objective, including raising €220 billion in green financing between 2019 and 2030. In the first quarter of 2024, Banco Santander had €1.3 trillion in total funds, 166 million customers, 8,400 branches and 211,000 employees.