Increase off plan property sales and value in a challenging market
With recent news confirming that new housing in the UK has topped 200,000 and planning permissions are running at 275,000 a year, next year could be a tough year for your off-plan property sales.
In London, the shenanigans surrounding Brexit continue to haunt the market. While the number of new builds appears to be curtailed in the capital, so too is the number of transactions. Taken in combination, these factors should help to keep prices from falling. Indeed, recent figures released by estate agent Haart shows that London property price growth has increased to 7.6% over the last year, while demand has fallen by more than a third.
Across the rest of the UK, a similar pattern is starting to emerge, though while demand has fallen slightly, the number of new build properties coming to the market is increasing.
The secret for property developers to increase off-plan sales is having a good, consistent sales strategy that adapts to make sure your new build properties stand out from the crowd. Having discussed a sales strategy to grow your off-plan sales in 2017 in my last article, in this article I want to look at how to make your off-plan and new build developments highly sellable – and then get them sold.
Highlight your unique selling point (USP)
One of the problems that today’s home buyers voice is that one development is very much like another: the same layout; the same property dimensions; the same fixtures, fittings and white goods. When faced with such a ‘non-choice’, the buyer usually goes with the best value option.
Your USP helps to command premium prices in the face of stiff competition. We’ll be able to highlight these to investors from the UK and overseas, providing evidence that supports the USP as an exceptional buy-to-let investment opportunity.
Distinct style and design features that make properties more sellable include:
- Extra and innovative storage space, particularly in kitchens and bedrooms
- Convenience items – think outside the box, and include things like bin shoots, remote control lighting and heating, etc.
- Rooms that benefit from a lot of natural light
- Open-plan living space
- Green features
Add a touch of luxury
There are plenty of design and interior features that can be added to increase the ‘feel’ of a new build. People love luxury features – a “hero” component they can boast about. A little touch of luxury sells to both home buyers and renters. Don’t underestimate the potential of luxury to turn on property investors who want to benefit from premium rental prices.
Common areas in apartment blocks: swimming pools, gyms, and rooftop gardens are all luxury features that help off-plan property sales. Within an apartment or house, consider a library or study, top-of-the-range appliances, smart heating and lighting, etc.
Consider price and design
It’s hard to sell an off-plan property as a bargain. It is, after all, effectively no more than a concept − a box of air that is captured in artist’s impression and a floor plan.
When we recommend off-plan properties to investors, we discuss the local area, its economy, and property fundamentals – shops, schools, transport links, major employers and major investment. We’ll also talk about the property itself.
A design including luxury features provides great talking and selling points, but as a developer, you should also pay attention to floor space layout – long halls reduce living space, while cleverly designed storage increases it. Available living space increases usable space and value which sells properties.
For off-plan properties, size matters
Some developers seek to maximise profits by maximising the number of units they build on a site. They’ll go for 50 one-bedroom apartments rather than 25 two-bedroom apartments. But consider this: those 50 one-bedroom departments need 50 kitchens, 50 bathrooms, and 50 sets of white goods. That’s a lot more expense in kitting out a block of one-bedroom apartments. And a lot more units to sell too.
Two-bedroom apartments garner more investor interest, too. They’re easier to find tenants for and command a higher rent.
When you’re planning a development, think about size long and hard – if you’re aiming at the student market, then one-bedroom places may be the way to go. But if you want to generate maximum interest from the UK and overseas investors, then size matters.
To park or not to park?
There’s a move towards zero parking spaces in London. Millennials are more likely to use public transport (especially with the Night Tube now providing 24-hour travel options and property investment opportunities for investors). Outside London, parking spaces are more important.
Consider target markets, location and local transport links, and then decide on whether to offer parking for all, a limited number of spaces, or none at all. The extra space freed to build extra apartments (or enhance the size and design of those planned) may pay dividends, but if it makes your off-plan properties harder to sell then it could be highly detrimental to sales (and profit).
Make your new build properties energy conscious
Traditionally, energy-conscious homes have been more attractive to home buyers than investors. We’re beginning to see this dynamic changing. As utility bills take up a larger slice of household expenses, renters are getting energy conscious. Energy-efficient homes sell more easily to tenants and command higher rental prices.
Do your research and provide it to investors
One of the things we do here at Castlereach is research property investment opportunities and relay that investment to investors. We make sure our investors know why your development is an ideal property investment opportunity and the property fundamentals that off-plan purchases will benefit from now and beyond completion.
The developer’s research will highlight why the apartments are in demand locally. Look at the local market, the demographics, the local employers and the population that make up the average homeowner or tenant. Investors want to buy off plan properties that benefit from natural demand, and not be blighted by being the wrong size in the wrong location.
UK off-plan property sales still attractive for investors
People in the UK may be reticent about buying homes at the moment (perhaps because of the economic uncertainty caused by Brexit), but property investors are increasing their activity. It is especially true of overseas investors. Recently, Skipton International announced an 80% increase in mortgage applications from British expats between August and November. That growth in interest mirrors our experience at Castlereach.
Overseas investors are benefitting from the slide in the pound. They haven’t been made nervous by the thought of the UK outside the EU. The demand for homes looks set to continue to outweigh the supply.
Find an edge to push your off-plan property sales through the roof
When looking for the edge that will help drive off-plan property sales, finding your USP and designing properties that appeal to buy-to-let investors will be a key theme in 2017. So, too, will your ability to attract investors from the UK and overseas.
While the fundamentals that make new build developments an attractive investment are the same for investors from the UK and overseas, how off-plan properties are marketed to different cultures requires individual approach and evolved strategies. That’s where our property consultants come into their own – we have huge reach within high net worth investment communities as well as the experience and strategy to sell your off-plan property, off market within agreed timescales.
Contact us today on + 44 207 923 5680, and we’ll be happy to discuss the help and expertise we can offer you as we link the best developers with active investors in the UK and overseas.
Live with passion and fun,
Brett