Clients are having to compromise on condition or location, say brokers
The slowdown in new builds in certain parts of the country is driving up competition for second-hand homes, with brokers warning that buyers are being forced into compromises and bidding wars.
A recent report by buy-to-let insurance specialist Alan Boswell Group showed that while smaller towns are the UK’s leading locations for new build home sales, hundreds of towns and many major cities face significant shortages.
Broker Tom Wright (pictured above left) is based in one of these cities, Liverpool, and told Mortgage Introducer that the squeeze on new developments is backing more and more buyers into a corner.
“With fewer new-builds available, more buyers are competing for older properties, especially in well-connected areas,” he said. “Homes are selling quickly, often with multiple offers, pushing some buyers to compromise on condition or location just to secure a purchase.”
Wright added that while overall application volumes remain stable, the type of borrowing is shifting. Buyers are relying more heavily on mainstream mortgage products and, in some cases, renovation loans or high loan-to-value deals to secure homes in need of work. Liverpool, he noted, faces “long planning processes, complex brownfield site issues, and heritage restrictions” that are slowing new housing delivery, while demand for student and commercial development is siphoning off land supply.
In the East Riding of Yorkshire, Malcolm Davidson (pictured above right), of UK Moneyman, described a “two-tier market”, with first-time buyers still active but existing homeowners proving more reluctant to move.
“First-time buyers are in abundance and anything within their price range is flying off the shelves,” he said. “Mortgage rates are affordable so it’s quite a simple decision to buy if they are currently renting.
“There is a problem with next-steppers, though, and something is stopping them wanting to move up the ladder. Stamp duty is a blocker, and we find home movers do tend to be a bit more choosy.”
He added that many homeowners are waiting to see the “perfect” property before listing their own, leaving them unable to act when opportunities arise.
In Manchester, market pressure is acute. Julia Brownley of Manchester Money said a shortage of new builds was fuelling competition for existing stock, intensifying price growth and leaving first-time buyers in particular struggling to get on the ladder.
“We have a list of buyers who have been assessed for a mortgage in principle but are waiting to find a property,” she said. “When they do, they have to move very quickly and have little chance to negotiate on price due to many other buyers wishing to offer also, creating bidding wars.”
Brownley added that demand from overseas buyers remains strong, both from those seeking to settle in Manchester and from investors. But new development faces obstacles: “There is competition from industrial and commercial development making the cost of land expensive. Manchester also faces significant infrastructure challenges, particularly in transport and congestion.”
Across the country, brokers report a market still buoyed by first-time buyers and competitive mortgage rates but constrained by a lack of new housing supply. With developers contending with planning delays, land costs and competing uses, older properties are bearing the brunt of demand — and buyers are paying the price.
