Activity is up, but how could you grab a larger slice of sales?
Mortgage lending is rising. The number of residential properties purchased in February was the highest for the month since February 2007. The market is picking up. The question for property developers is how to grab a larger slice of this renewed activity.
Residential property purchases bounce back to life
The mortgage market is very much alive and kicking. The numbers and sizes of mortgages extended are up strongly compared to February 2017:
- Remortgage transactions are up 11.3% to 35,400
- Buy-to-let remortgage deals are up by 20.5% to 14,100
The number of house purchases has bounced, too. A total of 50,000 transactions were completed in February, with first-time buyers leading the way.
Although fewer buy-to-let purchases were made this February when compared to the same time last year, numbers have stabilised at around 5,200.
We believe that investor purchases may now begin to rise. We are seeing an increased appetite for residential investment property. This mirrors research by Aldermore, which found that 41% of landlords plan to expand their portfolio over the next 12 months, while only 8% plan to reduce.
This augurs well for the market going forward. Property developers that deliver what the market wants are likely to boost sales numbers.
What do buyers want from new build?
The property market in the UK is probably more diverse than it has ever been. Developers of new builds face challenges to create the homes that a changing demographic demand. It is no longer ‘one-size-fits-all’. Developers must meet demand by building the homes that people really want. This ranges from first-time buyer homes to upsizers and downsizers, relocators, and specialist accommodation.
Recent research conducted by the NHBC Foundation and Savills provides valuable insight into what buyers are looking for in new build properties.
· First-time buyers
Their biggest concern is affordability. Schemes such as Help to Buy are important.
· Urban dwellers
Those buying in urban areas desire proximity to transport hubs, particularly trains and buses.
Upsizers are generally expanding families and want homes in the catchment areas of good schools.
Downsizers are usually older. They want to live near transport hubs too but also desire to be close to local NHS services.
· Suburban dwellers
Proximity to transport hubs is of lesser relevance, but they do want space to park their cars.
And property investors? What do they want?
The sector that the NHBC/Savills report doesn’t specifically cover is the property investor market. Perhaps it doesn’t need to. Our experience is that investors buy property to let to specific demographics. In other words, they desire all the above.
The single-style home approach may not be the best strategy for developers to follow in the constantly changing UK property market. But to sell across multiple buyer personas requires more effort, more marketing expense, and a greater emphasis on targeting a diverse range of buyers. Or you could let us take this strain, and sell to the increasing demand from our diverse property investors.
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