The pandemic and resulting lockdown have triggered a shift in priorities when it comes to where and how we want to live. For many, a flexible home with space both to relax and work in comfort is the ideal. Preferably it will also come with green credentials in a vibrant neighbourhood, supporting health and wellbeing.
Unlike the country’s existing housing stock, the new build sector has the chance to adapt its offering to provide the kind of homes buyers are looking for. But although current momentum is positive, there are clear headwinds for the economy and employment that will weigh on the market.
As highlighted in our recent report, Delivering new homes resiliently, developers face additional challenges caused by the phasing out of Help to Buy and, with new sites starting up at around 47 per cent of pre-Covid levels, the need to ramp up supply.
Building resilience into the new homes market is, therefore, key and there are a number of themes for developers to consider. These include broadening the appeal among certain age groups – for example, just seven per cent of homes bought by people aged 41 to 60 are new build – as well as addressing the relative undersupply of smaller new build homes of up to 1,100 sq ft, which may become more of an issue when purchasing power is reduced post-Help to Buy.
There also needs to be a balanced mix of tenures and finance models which will help delivery in more challenging times. Our analysis shows that a large site where 20 per cent of the homes are built for private rent could be delivered 25 per cent faster than a site with no build to rent stock.
And then there’s the appeal of energy efficient housing as sustainability creeps up the priority list for many buyers, though this comes at a cost. More efficient homes tend to be more expensive to buy.
Finally, while we are used to measuring the value of a place in financial terms such as land value and gross development value (GDV), a different approach that looks beyond money is gaining traction.
Environmental, social and governance (ESG) value is rising in importance – for residents that means being part of a well-served, well-connected, nurturing community and for a business it opens the door to more investment, albeit meeting ESG expectations will put some pressure on land values.
Further information
Contact Savills Residential Development Sales
-rs.jpg)
.jpg)
