Property Market On The Rise But Not Everyone Is Building

Issue 100

The housing market appears to be in rude health, with enquiries and sales on the up across the North East. Regional, private developers can't build fast enough - and yet not everyone is rushing to market. Wayne Halton, PR specialist in the built environment space, reviews the landscape.

There’s little doubt the residential property market is bouncing back to good health. A momentum is building, and agents have reason to be more cheerful than this time last year.

Property enquiries are rising along with house prices. Inflation is set to steadily fall which is further good news for anyone buying or re-mortgaging

The gloom of 2023 is lifting although some commentators are saying the market remains fragile. Affordability and realistic prices remain key issues in the market.

Michael Mortimer, MD of punchy, expanding Newcastle estate agency Hive Estates, said; “Activity is reaching pre-pandemic levels. We are getting multiple viewings and offers for a home. There isn’t a mad rush but it’s still busy and that’s what we want to see for everyone in the market.

“The growth and activity we are seeing is led by upsizers, that’s those people moving up the property ladder. We’re also seeing high levels of first-time buyers trying to get on the ladder and escape the renting trap.”

The average UK house price is now just £1,800 off the peak recorded in June 2022 after it increased by 0.4% in February, marking the fifth monthly rise in a row, according to Halifax.

Zoopla is also reporting an uptick in the number of buyers and sellers. The property website is predicting a 10% rise in total house sales (1.1m) in 2024 compared to 1m last year

And yet the country is not building enough new houses or the type of homes many people and communities want. The demand is there but the supply isn’t. There were fewer than 250,000 homes built last year across Great Britain, falling well below the 300,000-homes target for England alone.

The Competition and Markets Authority (CMA) recently published the results of a year-long study into the UK housebuilding market which blamed a combination of the planning system and the limits of speculative private development for the persistent under-delivery of new homes.

Talk to any mid-tier, private developer and they all frown or, in worst case scenarios, start ranting and frothing at the mouth when you mention planning and the interminable delays they face.

The CMA has called on Government to do more to support the SME housebuilding sector, which has seen numbers fall significantly since the 1980s, as well as go further and faster on planning reform.

The report found two-fifths of homes built between 2021 and 2022 were delivered by the largest, national housebuilders while more than 50,000 homes were delivered by thousands of smaller, regional builders.

Jan Dale, director and founder of regional estate agent and new homes specialist UrbanBASE, is optimistic about the opportunities for SMEs, and developers building 50 or less homes a year with funding readily available. She said: “Residential development land in the right location is at an all-time high and land value in areas such as Durham, Gosforth, and Northumberland are all seeing robust growth due to buyer-demand.

“The right location. The right style of home. The right price. Remains the future of success in new housing schemes. As such new housing schemes by Pimlico Homes and Banks Homes, both in Durham City, have all sold off-plan and at new price points.”

She adds: “The North East does need a degree of new social housing, but there is also an absolute shortfall of larger, luxury, housing stock in our cities to attract and retain senior personnel and the best professionals to our region.”

While there’s opportunities for the smaller developers, the volume builders are cutting back. Taylor Wimpey recently revealed it expects to see a further drop in completed property sales this year, with profit margins continuing to be squeezed by soft house pricing and higher costs. During 2023, total UK house completions fell to 10,438 from 13,773. Taylor Wimpey expects the number of UK completions this year to be fewer than 10,000. Persimmon is following suit and is also planning to build fewer homes this year.

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