The appeal of UK new builds for overseas buyers
By Molo
The UK new build market presents a compelling proposition for international investors seeking quality housing assets with strong growth potential.
While Savills research indicates overall supply constraints - with 217,911 new homes completed in 2024, down 6% from 2023 - these limitations potentially strengthen the investment case for overseas buyers by supporting property values through restricted supply and heightened competition for quality housing assets.
For mortgage brokers supporting clients, the new build market offers distinct advantages, when working with international investors, a segment that remains underserved in today's market.
Why new builds appeal to international investors
New build properties offer several benefits that make them particularly attractive to overseas buyers:
Turnkey condition
New build properties are ‘ready to let’, reducing concerns for remote landlords.
Energy efficiency
Modern building standards ensure lower running costs and better environmental credentials. The majority of new builds typically achieve EPC ratings of B or above.
Warranty protection
Most new builds come with a 10-year warranty, such as the NHBC warranty, which covers structural defects and provides financial protection against potential issues.
Lower maintenance requirements
The use of contemporary materials and technologies means new builds are less likely to need regular maintenance, an advantage for international investors managing properties remotely.
Chain-free purchase
Buying directly from a developer eliminates the risk of a purchase falling through due to issues in a property chain, making the process smoother and less stressful.
Martin Sims, Distribution Director at Molo, notes: "International investors increasingly view UK new builds as premium assets in their global portfolios.
The combination of quality construction, strong rental demand and the prestige associated with UK property continues to drive interest from overseas buyers. Asia and the Middle East remain strong markets, with the United States and others, building momentum. Experienced intermediaries who understand both the mortgage landscape and the unique needs of international clients offer and deliver exceptional added value in this market."
The investment outlook
Recent Savills data* shows encouraging signs in the new build sector. After declining in 2023, construction starts across all tenures partially recovered in the second half of 2024, with larger housebuilders leading the way. A gradual recovery indicates a stabilising market with carefully managed supply, a positive for maintaining asset values into 2025.
Sales rates towards the end of 2024 reached their highest level in over two years, with major housebuilders reporting an average of just o[JE5] ver 0.6 sales per outlet per week in October. Healthy demand may support price stability and potential appreciation, moving forward.
High rental demand and potential stronger yields for new builds
The rental market shows strong demand, which has created favourable conditions for investors. The supply of rental homes remains between 18% and 22% below pre-pandemic levels, while tenant enquiries stand at nearly double pre-pandemic figures, with an average of 11 enquiries per rental property.
Regional variations show particularly strong growth in the Northeast (11.9%), Yorkshire & Humber (7.4%) and Northwest (6.9%), while London has seen a 22% surge in tenant enquiries at the start of 2025.
The persistent imbalance between supply and demand has driven a 8.7% rise in private rental prices in the year to January 2025, supporting the investment case for new build properties.
New build properties also tend to achieve higher rents than similar properties in the same area. For example, a new build home may rent for between 23% and 41% more than a similar sized older home.
Supporting international clients with Molo
We have broken new ground in international lending at Molo for the new build buy-to-let market, removing traditional barriers that overseas investors typically face.
No UK income requirements
Unlike most lenders, who demand extensive UK banking history, we don't require any minimum UK income. The market is more accessible to qualified investors from Asia, the Middle East and beyond.
First-time buyer and first-time landlord acceptance
International investors can enter the UK property market without prior UK property ownership, opening opportunities for new build investments regardless of domestic experience.
Flexible assessment options
Clients can benefit from either our Interest Coverage Ratio (ICR) calculation or a full affordability assessment, providing multiple pathways to mortgage approval.
Higher loan-to-value options
While most lenders restrict international investors to 60% to 65% LTV, we offer loans up to 85% LTV on certain products, significantly reducing the capital required to enter the market.
Dedicated international expertise
Our team includes specialists in overseas applications who understand the unique verification challenges faced by international investors and can provide tailored support throughout the process.
Meeting international client demand
Focusing on new build properties and leveraging specialist lenders who understand international requirements allows brokers to position themselves at the intersection of global investment capital and the UK's high-quality housing development sector.
With housing undersupply likely to continue despite planning reforms, new build properties remain an attractive proposition for international investors seeking strong returns and hassle-free management in the UK property market.
For adviser use only. Please note this content has been supplied by our lender partner and as such, is their responsibility. No party shall have any right of action against Legal & General in relation to the accuracy or completeness of the information in this article.