Small can be beautiful, at least amongst property developers. The national house builders have huge economic power and political influence, but their scale and structure often makes it hard for them to adapt to local conditions or even, as has been much reported of late, to provide a decent quality product. As greater competitiveness grips the market, it is the more innovative, flexible and higher quality builders who are succeeding. They do include some national names, but this is territory on which the small, local players, tend to have the advantage.
Slower London influence
Important to the upper end of the new build country market for decades, people moving from London are now much less likely to be cash buyers. For example, 60% of Londoners interested in the near sold-out development in Devon’s South Hams district, shown here, have a dependent sale, double the proportion of just a few months ago. This is slowing rates of sale, enabling local buyers with a complete chain below them, to step in. It is also focussing attention on the value of local buyers and what they want.
Local developers adapt
Another Devon development, just launched, provides a good example. In a lovely village within commuting distance of Exeter and too far from the coast to be of obvious interest to retirees or holiday home buyers, we expect almost all buyers of its 28 houses to come from the surrounding area. To build at all, Devon-based developers Westhaven had to demonstrate great sensitivity to the built heritage and community of the village. Now, they are wooing purchasers with a level of personalisation which larger operations would struggle to match. Thus kitchens, bathrooms and floor coverings are only installed when the buyers of each house stipulate what they want and, if they get in early enough, they could rearrange the whole house.
The Westhaven development is a little larger than most rural sites and includes some terraced houses. The ability to include affordable units on sites of this size and much smaller, is likely to become more important over the medium term. If so, this will again be to the advantage of smaller, adaptable firms and should, following Westhaven’s example, allow buyers at more modest prices to enjoy superb levels of personalisation. That said, all players are of course at the mercy of market forces and, in contrast to the inner London market, the main cry from the Jackson-Stops new homes teams across the country at present is “Shortage of stock”.
London developers switch
A third of the new homes sold in London last year were sold into the corporate (“build to rent”) private rental sector, many schemes having switched to the rental market between construction start and completion*. Even so, within, say, three miles of Trafalgar Square, the oversupply of new homes is set to continue, placing buyers very much in the driving seat.
In suburban London and closer-in home counties areas, the picture is more balanced. There is no oversupply and Help To Buy loans are of greater significance. Almost all developments are aimed squarely at the needs of local owner occupiers rather than overseas investors, and price expectations and fluctuations have been much less volatile. It is also much easier for large new house schemes to adapt to demand because unlike, say, a 40 storey, 400 unit residential tower, not everything has to be built at once. It’s difficult to adjust your sights, if they cannot be moved.
Finally, if you are interested in a new home but want some variation or change which is not explicitly being offered, don’t hesitate to ask. If you are serious, your question will be taken seriously. Some house builders are more proactively flexible than others, but almost all of those we deal with are keen to please and to continuously learn. Who knows – if it catches on, your request might initiate a wholesale readjustment.